The European Central Bank (ECB) has unveiled an ambitious dual-track strategy to integrate distributed ledger technology (DLT) into its settlement infrastructure, signalling a major evolution in the architecture of Europe’s financial market systems.
Under the plan approved by the ECB Governing Council, the initiative will unfold along two parallel paths.
Pontes
ECB advances Distributed Ledger Technology
The first, known as Pontes, represents a short-term solution aiming to link DLT platforms directly with the Eurosystem’s TARGET Services, which handle critical real-time gross settlement and securities settlement functions across Europe.
Pontes is designed to provide a single Eurosystem DLT-based offering that enables settlement in central bank money, with a pilot scheduled for launch by the end of the third quarter of 2026.
During this pilot phase, the ECB will assess the feasibility of further enhancements to ensure full alignment with TARGET Services’ operational, legal, and technical standards.
The Pontes approach builds on the ECB’s extensive exploratory work conducted between May and November 2024, where 64 participants carried out more than 50 trials to evaluate the application of DLT in wholesale central bank money settlement.
Appia
The second track, Appia, focuses on a long-term strategic vision to create a future-ready, innovative, and integrated ecosystem not only within Europe but with the potential to facilitate efficient cross-border operations globally.
Through Appia, the ECB intends to continue analysing DLT-based solutions in collaboration with both public and private sector stakeholders, ensuring that any future system redesigns incorporate the benefits of DLT while maintaining the Eurosystem’s commitment to financial stability.
In its public release, the ECB emphasised that this two-track approach reflects its unwavering commitment to “supporting innovation without compromising on safety and efficiency in financial market infrastructures.”
Both initiatives will establish dedicated market contact groups to foster ongoing dialogue with industry participants.
A call for expressions of interest in joining the Pontes contact group is expected shortly.
The ECB’s exploratory report, published alongside the announcement, concluded that DLT has clear potential to reduce operational costs while mitigating credit and settlement risks in wholesale payments markets.
However, it also cautioned that further analysis and phased implementation are required to ensure that technological innovation does not undermine the robustness or interoperability of Europe’s existing payment systems.
As central banks worldwide assess DLT’s capabilities, the ECB’s Pontes and Appia projects stand as evidence of Europe’s intention to remain at the forefront of payments and settlement innovation.
The coming years will reveal whether these initiatives can transform the Eurosystem’s infrastructure into one that is truly future-proof, seamlessly integrating new technologies without jeopardising the safety and efficiency upon which Europe’s financial system depends.
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