The European Central Bank (ECB) is considering 3 options for integrating central bank money (CeBM) with DLT infrastructure, ranging from the direct issuance of tokenized reserves to the use of private intermediaries.
ECB Executive Board member Isabel Schnabel outlined the regulator’s approach to integrating central bank money and the two-tier monetary system into an on-chain environment.
Specifically, the ECB is exploring 3 models for modernizing its infrastructure. They differ in how central bank money is issued and used across DLT networks:
- Direct issuance of tokenized reserves. The central bank issues reserves directly on a programmable platform. The reserves exist in tokenized form from the outset and can be used directly for on-chain settlement.
- Connecting the traditional RTGS system to a DLT platform. A dedicated interoperability layer synchronizes settlement between the central bank’s existing infrastructure and a DLT network. Under this model, reserves are held off-chain.
- Tokenization through a private intermediary. An intermediary issues settlement tokens fully backed by central bank reserves. The reserves themselves remain off-chain, meaning the issued tokens represent a private claim rather than CeBM itself.
The ECB also intends to preserve the existing two-tier monetary system in an on-chain environment. Commercial bank money would continue to be backed 1:1 by central bank money. Tokenized equivalents would be used in place of conventional bank deposits and reserves. Schnabel said this approach would preserve the existing system’s core characteristics, including safety, trust, and scalability.
To integrate central bank money with DLT infrastructure, Eurosystem launched the Pontes blockchain platform on September 21, 2026. It allows CeBM to be used to settle transactions involving tokenized assets, including securities, bank deposits, and stablecoins. Settlement can take place through the TARGET payment system or the Eurosystem’s DLT infrastructure. The ECB plans to move Pontes to 24/7 operations and add decentralized programmability.
At the same time, under the Appia project, launched in March 2026, the Eurosystem is exploring the long-term architecture of a tokenized financial market. It is considering 3 configurations:
- a common DLT ledger;
- several shared ledgers;
- interconnected networks operated by the Eurosystem and market participants.
Under all 3 configurations, the infrastructure would need to support interaction between wholesale central bank money and financial assets, including securities, bank deposits, and stablecoins.
According to Schnabel, the ECB’s approach is centered on preserving central bank money’s role as a settlement anchor as digital finance evolves. Under the model she presented, retail and wholesale CBDCs are classified as public settlement assets, while tokenized bank deposits and stablecoins are classified as private settlement assets. Tokenized bonds, equities, and other financial instruments are treated separately as trading or investment assets.
The ECB has been experimenting with new technologies for central bank money settlement since 2024. In 2025, it approved a two-stage plan to integrate digital asset settlement through DLT solutions, aimed at enabling safe and efficient settlement using CeBM.
