ECB will invest in tokenised securities, and settle trades on its own new rail
4 hours ago
- The ECB is preparing to invest in tokenized securities using its own funds, moving from infrastructure development to active market participation.
- Settlement will use central bank money via the Pontes system, designed for distributed ledger technology trades.
- The ECB will buy conventional euro-denominated debt from euro area governments, agencies, and supranational bodies, with only the tokenized format being new.
- A small, unspecified portion of the ECB's own funds portfolio will be allocated, with timing and details to be decided by the Executive Board based on market development.
- The investment is from the ECB's own funds, not a monetary policy tool, putting its own income at risk rather than the euro area economy.
- The ECB aims to experience the full investment cycle—trade execution, settlement, system operation, and position management—to learn faster than regulatory oversight alone allows.
- This initiative is part of the ECB's broader plan (Pontes and Appia) to keep central bank money effective in digital ledger-based markets, separate from the retail digital euro project.