ECB Approves Two-Track Plan for DLT Integration in Eurozone Settlements

The European Central Bank (ECB) has approved a comprehensive two-track plan to integrate distributed ledger technology (DLT) into its settlement systems using central bank money. This initiative aims to modernize Europe’s financial infrastructure and enhance the efficiency and safety of financial market operations.

The first track, named “Pontes,” focuses on a short-term solution by connecting blockchain-based DLT platforms with “TARGET” Services. This suite of financial services is designed to facilitate the flow of payments and securities within the eurozone. A pilot for Pontes is scheduled to launch by the end of the third quarter of 2026. This pilot will leverage insights from the ECB’s exploratory DLT trials in 2024, which involved over 50 experiments and 64 participants. The goal is to test a unified settlement system in central bank money, ensuring that innovation is supported without compromising safety and efficiency in financial market infrastructures.

The second track, called “Appia,” takes a longer-term approach. It aims to develop an integrated ecosystem in Europe that facilitates safe and efficient operations at both the regional and global levels. The ECB will continue to study DLT applications in wholesale central bank settlements while collaborating closely with public and private partners. Market contact groups will be established for both Pontes and Appia to maintain dialogue with industry stakeholders and gather feedback. A call for expressions of interest to join the Pontes group will be published soon.

This plan comes as central banks worldwide explore how blockchain can streamline settlements while maintaining control over money flows. In 2023, a Bank of England experiment successfully tested using DLT to run large-scale interbank transactions. The prototype demonstrated the potential to speed up and lower the costs of real-time gross settlement (RTGS) systems by linking them with other financial infrastructures and ledgers.

The ECB also published a report detailing the results of its recent DLT exploratory work. The report confirmed strong market demand for settling tokenized assets in central bank money, with 1.6 billion euros settled during trials involving 64 participants across Europe. The findings indicate that DLT could reduce fragmentation, complexity, and technological inefficiencies in capital markets by enabling atomic, programmable settlement. However, the report also highlighted the need for standardization, harmonized legal frameworks, and an interoperability link with TARGET Services as soon as feasible.