Schnabel of the European Central Bank states that central bank money “must be on-chain”

Isabel Schnabel bluntly stated that stablecoins lack “the independent ability to rapidly scale liquidity during times of financial stress,” a gap that only central banks can fill.

Her solution appears to be rooted in tokenization, adding that this technology can make financial transactions faster, safer, and more programmable—provided that the safest assets in the system, such as central bank money, are actually running on the same rails as all other tokenized assets.

This is a significant acknowledgment from inside the Eurosystem, as for years officials at the European Central Bank have viewed distributed ledger technology (DLT) as a regulatory subject related to stablecoins and the crypto market, rather than infrastructure to be directly adopted.

The near-term part of this plan is the Pontes project, which the European Central Bank expects to launch in September. Pontes will initially synchronize the ECB’s existing TARGET services (the euro transaction settlement payment infrastructure already used by banks in the Eurozone) with DLT platforms operated by market participants.

Schnabel stated that, over time, Pontes aims to directly support settlement finality on DLT platforms operated within the Eurosystem, equipped with smart contract functions, and ultimately achieve 24/7 operation.

The European Central Bank has already mapped out a broad roadmap. ECB executive board member Piero Cipollone has positioned this goal as establishing “a single digital financial market coexisting with” the euro itself.

Pontes is the bridge, while the Appia project is the destination. Appia’s mission is to outline the long-term architecture, technical standards, and legal framework needed for a truly tokenized asset market in Europe, with a full blueprint expected by 2028. This two-year transition period reflects that fundamental issues remain unresolved.

That said, experiments testing the interoperability between DLT platforms and existing settlement rails have processed about 1.6 billion euros among 64 participants in nine jurisdictions. Since 2021, European issuers have issued nearly 4 billion euros in DLT-based financial instruments. Since March 2026, the European Central Bank has also accepted DLT-based assets as eligible collateral for its own credit operations.

None of this directly sets the price of Bitcoin, but it operates in a market where institutions are already using blockchain rails to transfer trillions in tokenized value, and every signal that a G7 central bank is willing to put its own money on-chain adds legitimacy to the crypto market infrastructure that has already been running for more than a decade.

If the European Central Bank—an institution established to take a conservative stance toward monetary infrastructure—is racing to avoid “disintermediation” by private tokenization, it reminds us that the debate crypto traders track through Bitcoin price and stablecoin volumes is exactly the same debate taking place inside central bank boardrooms.