ECB Doubles Down: DLT Settlement with Central Bank Money Goes Live

The European Central Bank just flipped the switch on blockchain-based settlement—using real central bank money. This isn't a test anymore.

Why it matters: After years of 'exploratory phases' and 'working groups,' the ECB is finally putting its digital currency where its mouth is. Wholesale CBDCs meet DeFi rails.

The fine print: TARGET2 gets a DLT overlay, letting banks settle securities transactions 24/7. No more waiting for business hours—unless you count the 3-year rollout timeline.

Between the lines: Somewhere in Frankfurt, a bureaucrat just uttered 'programmable money' without laughing. Meanwhile, crypto exchanges are scrambling to rebrand their stablecoins as 'Euro 2.0.'

The kicker: Banks get blockchain efficiency… provided they jump through enough regulatory hoops to make a circus performer dizzy. The future of finance—with training wheels.

• Short-term track (Pontes) to pilot link between distributed ledger technology platforms and TARGET Services by end-2026
• Long-term track (Appia) to shape future-ready, innovative, integrated financial ecosystems
• Initiatives will deliver on Eurosystem’s continuing commitment to safe, efficient settlement in central bank money

The ECB’s Governing Council has approved a plan that will enable settling distributed ledger technology (DLT) transactions using central bank money. The initiative follows a two-track approach: the first track “Pontes” provides a short-term offering to the market – including a pilot phase – and the second track “Appia” focuses on a potential long-term solution. The decision is in line with the Eurosystem’s commitment to supporting innovation without compromising on safety and efficiency in financial market infrastructures.

Pontes will offer a Eurosystem DLT-based solution, linking DLT platforms and TARGET Services to settle transactions in central bank money. The Eurosystem plans to launch a pilot for Pontes by the end of the third quarter of 2026. It will offer a single Eurosystem solution which incorporates features used in the Eurosystem’s exploratory work on DLT in 2024.

During the pilot, the Eurosystem will also explore the feasibility of further enhancements in line with the TARGET Services operational, legal and technical standards. Between now and the launch of the Pontes pilot, the Eurosystem will consider requests for further DLT-related trials and experiments.

Appia focuses on a long-term approach for an innovative and integrated ecosystem in Europe that also facilitates SAFE and efficient operations at the global level. The Eurosystem will actively continue to analyse DLT-based solutions and collaborate with public and private stakeholders.

To ensure continuous dialogue with the market, the Eurosystem will establish dedicated market contact groups for both Pontes and Appia. A call for expressions of interest in participating in the Pontes contact group will be published soon.

Pontes and Appia will build on the Eurosystem’s exploratory work on new technologies for wholesale central bank money settlement, which was conducted between May and November 2024. In this exploratory work, 64 participants conducted over 50 trials and experiments. A dedicated report outlining the results of the exploratory work has been published.

Source: ECB