From vision to delivery: building Europe’s tokenised financial market

Piero Cipollone, Member of the Executive Board of the ECB, delivered a speech at the Deutsche Bundesbank’s symposium on “Future of payments: trends and innovations in Germany and Europe.”

He highlighted that two years ago, Europe had a unique opportunity to leverage tokenisation and distributed ledger technology (DLT) to reshape financial markets, making them more efficient and automated. The vision was to build an integrated European ecosystem for digital assets with central bank money at its core.

Despite progress, challenges remain, including fragmentation of markets, reliance on private settlement assets, and external dependencies. The ECB aims to support a safe, integrated, and competitive market by offering settlement in central bank money and fostering innovation.

The ECB has advanced from experimentation to implementation through projects like Pontes and Appia. Pontes will enable settlement of tokenised transactions in central bank money, with plans to expand operating hours and functionality by 2028. Appia will develop standards, governance, and legal frameworks to support a unified European tokenised ecosystem, with a roadmap for 2028.

Key conditions for success include interoperability based on common standards, public-private cooperation, and a harmonized legal framework. These elements are essential to prevent fragmentation, ensure legal certainty, and foster market adoption.

The ECB emphasizes that technological progress must be complemented by legal and regulatory clarity to realize the full potential of digital finance in Europe. The ongoing projects aim to build a resilient, innovative, and integrated European capital market for digital assets.

In conclusion, the ECB is committed to transforming its vision into a tangible reality through coordinated efforts, laying the foundation for the future of European finance.