The European Central Bank (ECB) has officially announced its plans to pilot a blockchain-based settlement system by the third quarter of 2026. The move marks a major step in the eurozone’s effort to modernise financial infrastructure, offering a bridge between traditional payment systems and decentralised technologies.
Dubbed the “Pontes” initiative, the pilot aims to enable secure and efficient settlement of distributed ledger technology (DLT) transactions in central bank money. The plan reflects growing momentum among global central banks to harness blockchain’s potential, without compromising the stability of financial systems.
Pontes: Bridging DLT with TARGET Services
At the heart of the ECB’s initiative is Pontes, a short-term strategy designed to link blockchain platforms with the Eurosystem’s TARGET Services, a core suite that processes real-time payments, securities, and collateral within the eurozone.
The Pontes pilot, launching by Q3 2026, will build on findings from the ECB’s 2024 DLT trials, which saw participation from 64 institutions across 1.6 billion euros worth of tokenised transactions. These tests revealed substantial demand for settling digital assets using central bank money and confirmed DLT’s promise in reducing market fragmentation and inefficiencies.
In its statement, the ECB emphasised that the pilot supports its commitment to innovation:
“The decision is in line with the Eurosystem’s commitment to supporting innovation without compromising on safety and efficiency in financial market infrastructures.”
Appia: Long-Term Vision for European Settlement Infrastructure
Alongside Pontes, the ECB is also launching Appia, a long-term track focused on shaping a fully integrated DLT settlement ecosystem. While Pontes focuses on short-term connectivity, Appia explores the broader evolution of Europe’s wholesale financial settlement system.
Experimental use cases for payment and settlement methods using Trigger Solution, TIPS Hash-Link, and Full DLT Interoperability. Source: ECB
Appia will involve continued research into blockchain applications and deeper collaboration with public and private stakeholders. The objective is to create a scalable, future-proof settlement model that could extend to global markets promoting interoperability, efficiency, and safety.
To ensure industry participation, the ECB will soon issue a call for expressions of interest to join dedicated market contact groups for both Pontes and Appia. These groups will serve as feedback channels and ensure that the system design meets practical needs.
DLT Trials Highlight Market Appetite and Challenges
The ECB’s announcement is grounded in the results of its extensive exploratory trials, which saw more than 50 experiments and engaged key financial actors. A newly published report summarises these findings, underlining both the potential and the prerequisites for adopting DLT in central bank settlements.
Key takeaways from the report include:
Strong market demand for central bank money settlement of tokenised assets
Blockchain’s ability to reduce complexity and inefficiencies in capital markets
The importance of atomic, programmable settlement capabilities
Urgent need for standardisation and legal harmonisation
Necessity of creating interoperable links with existing systems like TARGET
The ECB concluded that DLT could play a transformative role, but only if technological and regulatory gaps are addressed systematically.
A Global Trend Toward Blockchain-Driven Settlements
The ECB’s push reflects a broader global shift. Central banks in the UK, Singapore, and Hong Kong have launched similar experiments. In 2023, the Bank of England, in collaboration with the BIS Innovation Hub in London, successfully trialled a DLT-based prototype for large-scale interbank transactions. The prototype demonstrated how DLT could enhance the efficiency of real-time gross settlement (RTGS) systems while improving integration with other financial ledgers.
As digital assets become more mainstream, central banks are under pressure to modernise their back-end systems without ceding monetary control. The ECB’s dual-track strategy, immediate action with Pontes and long-term vision via Appia appears to balance innovation with caution.
While the 2026 pilot won’t be a full-scale implementation, it is a critical milestone in Europe’s journey towards a more digital and interconnected financial future. If successful, it could pave the way for routine settlement of tokenised assets using central bank money, reshaping how value moves across borders and platforms.
