ECB official calls for central bank money to move on-chain

Isabel Schnabel, an Executive Board member of the European Central Bank (ECB), has advocated for central banks to move money on-chain to support the growing tokenization of financial markets. Speaking at the Jackson Hole Economic Policy Symposium, Schnabel argued that for central banks to maintain their role in the settlement process, they must participate in distributed ledger technology (DLT) environments.

She emphasized that while stablecoins can serve as complements, they cannot replace central bank money because they lack the ability to provide elastic liquidity during financial crises. By tokenizing reserves directly, central banks could utilize smart contracts to automate processes such as repo transactions, collateral management, and margin calls, making monetary policy implementation more flexible and efficient.

To advance this vision, the Eurosystem is set to launch ‘Pontes’ in September 2026. This project will act as a bridge connecting market DLT platforms with existing TARGET services, allowing for the settlement of tokenized transactions using central-bank money. Additionally, the ECB is developing ‘Appia,’ a long-term blueprint for European settlement architectures, aiming to reduce financial fragmentation across the euro area through a more integrated digital infrastructure.