European central banks advance DLT settlement for future finance
The European Central Bank and Danmarks Nationalbank are developing a complementary digital financial ecosystem based on distributed ledger technology (DLT). This initiative aims to integrate DLT-based settlement models into European financial infrastructure, including for Danish kroner.
Pontes links DLT to central bank money
The European Central Bank is actively exploring distributed ledger technology (DLT) for financial market infrastructures, specifically for interbank settlement in central bank money.
This aims to foster a more integrated and efficient European infrastructure, maintaining security, stability, and access to central bank money for systemic transactions.
DLT, which distributes transaction databases among multiple participants, is seen as a key technology to enhance capital markets.
A short-term solution, Pontes, will connect market-developed DLT platforms with tokenized financial assets to the Eurosystem's TARGET Services.
This will enable the financial sector to develop and scale DLT solutions with access to settlement in central bank money.
Pontes is expected to launch in the third quarter of 2026 and will be expanded over time to include Danish kroner.
Appia charts the long-term DLT course
In parallel to Pontes, the Appia initiative is conducting analytical work to pave the way for a longer-term DLT-based ecosystem for financial markets.
Appia aims to produce a blueprint in 2028 with concrete designs for an efficient tokenized ecosystem and new market structures.
This work will outline the Eurosystem's complementary role in a future EU capital market infrastructure, complementing TARGET Services.
The Appia project covers the euro and other currencies made available by respective central banks in TARGET, including the Danish krone, ensuring a broad scope for future DLT integration.
Potential, but many unknowns
Danmarks Nationalbank's DLT engagement is crucial for integrating Danish market needs.
Tokenization offers efficiency, but significant uncertainties persist in technology and implementation.
This proactive stance is vital for adaptation, yet the final impact remains largely undefined.