European Central Bank advocates on-chain reserves to enhance monetary policy

The European Central Bank isn’t just watching the tokenisation wave from the shore. It’s wading in, with board-level backing for putting central bank reserves directly on-chain.

Piero Cipollone, a member of the ECB’s Executive Board, has laid out the case that tokenisation of financial assets through distributed ledger technology could deliver meaningful efficiency gains across European financial markets, promote deeper integration, and actually strengthen monetary policy. The catch: all of that only works if central bank money itself goes on-chain.

The case for tokenised reserves

As financial assets increasingly migrate to DLT platforms, the settlement layer needs to keep up. If private stablecoins or commercial bank tokens become the default settlement mechanism on-chain, central banks lose a critical lever of control over the financial system.

The ECB ran more than 50 trial projects across nine jurisdictions in 2024, and the results pointed clearly in one direction. Market participants want risk-free central bank money for settling DLT-based transactions. Not stablecoins backed by commercial paper. Not synthetic dollars pegged by algorithms. Actual central bank liabilities.

Pontes and Appia: the infrastructure roadmap

Two concrete initiatives anchor Cipollone’s vision. The first is the Pontes project, set to launch in the third quarter of 2026. Pontes will connect DLT platforms with the ECB’s existing TARGET Services infrastructure, creating a bridge between tokenised assets and traditional central bank money settlement. In plain terms, it lets institutions settle DLT transactions using the same euro reserves they already hold at the central bank, just routed through new technology.

The second is the Appia roadmap, published in March 2026. Appia is more ambitious in scope, aiming to produce a comprehensive blueprint for a European tokenised financial ecosystem by 2028. That timeline depends on extensive collaboration between public institutions and private market participants to establish shared standards and interoperability protocols.

As of end-March 2026, the Eurosystem has started accepting certain DLT-issued marketable assets as collateral for monetary policy operations. That’s a quiet but significant milestone. It means tokenised bonds or securities issued on distributed ledgers can now serve the same function in ECB operations as their traditional counterparts.

Why this matters beyond Europe

Cipollone’s framing is notable because it doesn’t dismiss DLT or treat tokenisation as a threat to be contained. Instead, it positions central bank participation as the ingredient that makes tokenisation safe enough for mainstream adoption. Without risk-free settlement assets, he argues, the tokenised financial ecosystem stays stuck in pilot mode, useful for experiments but too risky for the real capital flows that drive economies.

Market participants should watch the Pontes launch timeline closely. A smooth rollout in Q3 2026 would validate the technical feasibility and likely accelerate the Appia roadmap’s 2028 target.