European Central Bank launches Pontes blockchain settlement service

The European Central Bank has launched Pontes, a wholesale settlement service designed to link distributed ledger technology (DLT) platforms directly to the Eurosystem’s TARGET payment services. The platform allows financial institutions to settle tokenized asset transactions using central bank money, providing an alternative to private stablecoins or commercial bank deposits and reducing credit risk.

Initial participants who have completed onboarding include Deutsche Bank, Santander, and Clearstream. The service currently operates on business days between 8 a.m. and 4 p.m. CET, with long-term goals to expand to 24/7 operations by mid-2028. The ECB also indicated it would begin investing a small portion of its own funds into highly rated, euro-denominated blockchain-based securities.

This initiative aims to reduce market fragmentation and automate financial lifecycles through smart contracts. While legal settlement finality is currently anchored in the existing TARGET2 system, future iterations are expected to move finality directly onto a Eurosystem-operated distributed ledger.