The European Central Bank discusses the role of tokenisation, digital assets, and central bank digital currency in enhancing efficiency, fostering innovation, and supporting a unified European digital asset market.
The European Central Bank (ECB) has presented its insights on tokenisation and the future of finance during the Central Bank of Ireland’s Financial System Conference 2025, held on 25 November 2025.
The ECB explains that tokenisation involves converting assets into programmable tokens using distributed ledger technology (DLT), which manages ownership records and rules. This process aims to improve efficiency, reduce barriers to entry, and enable new digital asset types, including central bank money for retail and wholesale transactions, tokenised deposits, stablecoins, and tokenised financial and non-financial assets.
Expected benefits of tokenisation include enhanced trading, settlement, and custody processes, 24/7 operation, and increased access to capital markets for small and medium-sized enterprises. The ECB emphasizes the importance of developing a European market for digital assets with euro-denominated settlement assets and EU-wide regulation.
The ECB highlights risks associated with stablecoins, such as fragmentation of liquidity, risks to bank intermediation, and potential threats to monetary sovereignty, especially with stablecoins issued outside the EU. It advocates for robust regulation and supervision of crypto-asset service providers, including amendments to the Markets in Crypto-Assets Regulation (MiCA).
The ECB also discusses the role of tokenised central bank money as a safe settlement asset that can connect private asset networks, improve interoperability, and support market expansion. Its exploratory work in 2024 involved experiments and trials with multiple stakeholders, resulting in over 50 experiments and €1.6 billion in settled transactions.
Future initiatives include the Pontes project, which will offer a DLT-based settlement solution linking platforms to central bank money from Q3 2026, and the Appia project, aimed at creating an integrated European payments and securities ecosystem. These efforts seek to enhance safety, efficiency, and international connectivity in digital finance.
More information is available at the official ECB press release.
