European Central Bank Executive Board member Piero Cipollone said tokenized deposits and stablecoins require tokenized central bank money to serve as a public settlement anchor if Europe’s tokenized financial markets are to scale. He argued that without settlement in central bank money, sellers of tokenized securities risk being paid in assets they do not want to hold—assets exposed to price volatility or credit and liquidity risk—which would impede market development.
Cipollone highlighted Pontes, the Eurosystem’s distributed ledger technology (DLT) settlement initiative designed to connect market DLT platforms with the Eurosystem’s TARGET services and permit settlement in central bank money. The ECB expects an initial Pontes launch in the third quarter of 2026, enabling market participants to settle DLT-based transactions in central bank money. Pontes is part of the broader Appia initiative, published March 11, which aims to produce a blueprint for a European tokenized financial ecosystem by 2028.
Beyond central bank settlement, Cipollone said Europe needs stronger public–private cooperation and a legal framework that aligns with the underlying technology. One Appia proposal would establish interoperability standards so tokenized instruments can move across different DLT platforms using compatible data formats and smart contract conventions.
Cipollone urged market infrastructure operators, banks, custodians and technology providers to review the Appia roadmap and submit feedback to support public–private partnership development. He also warned that relying on a patchwork of national or partial rules risks limiting the benefits of advanced settlement infrastructure, even as the European Commission’s proposal to extend the DLT Pilot Regime represents an important step.
The comments come after stablecoin issuer Circle submitted feedback to the European Commission’s Market Integration Package on March 20, urging expansion of the DLT Pilot Regime and access to e‑money token cash account services for authorized crypto-asset service providers.
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