Schnabel outlines tokenised central bank money across DLT networks
ECB Executive Board member Isabel Schnabel presented the Eurosystem's strategy for on-chain wholesale settlement at the Bank of England. The initiative builds on Project Pontes, launched on September 21, 2026, to preserve the monetary anchor in tokenised financial markets.
Dual settlement connects TARGET2 with DLT
The Eurosystem launched Project Pontes on September 21, 2026, introducing a dual settlement model that links TARGET2 with distributed ledger technology.
Schnabel outlined how tokenisation enables atomic settlement—where transaction legs settle simultaneously or not at all—alongside automated programmability.
The ECB is exploring three structural paths for on-chain implementation: direct issuance of natively tokenised reserves, bridge synchronisation connecting RTGS systems to external DLT platforms, and private intermediary tokens.
Planned upgrades for Pontes include 24/7 availability and decentralised programmability to support market DLT networks.
Preserving the two-tier monetary anchor
Alongside Pontes, the Eurosystem's Project Appia explores long-term architectures ranging from single unified ledgers to interconnected networks and multiple shared ledgers.
Schnabel emphasized that providing wholesale central bank money on-chain is essential to preserve the two-tier fiat structure.
This architecture guarantees trusted, one-to-one convertibility between central bank money and tokenised commercial bank deposits across fragmented European markets.
Practical bridges beat ledger dreams
The ECB rightly moves to prevent private stablecoins from usurping wholesale settlement.
Pontes offers a practical bridge that avoids forcing banks onto an unproven unified ledger.
Yet orchestrating disparate DLT networks without creating new silos will prove challenging.
Source: Isabel Schnabel: Central banks on-chain
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