According to a plan recently announced by the ECB, the institution is developing two projects, Pontes and Appia, to connect the euro with financial markets operating on blockchain technology. The ECB considers this a strategic step to protect Europe's monetary sovereignty in the context of the increasing influence of private cryptocurrencies, especially stablecoins pegged to the US dollar.
Speaking in March, Piero Cipollone – a member of the ECB's Executive Board – warned that if Europe does not build its own "digital routes," the region risks becoming completely dependent on infrastructure developed by other countries.
In recent years, many large banks, investment funds, and financial institutions have stepped up experimentation with “tokenizing” financial assets. This is the process of converting assets such as bonds or investment funds into digital tokens that can be traded on blockchain or distributed ledger systems (DLT). This technology is expected to automate transactions, reduce costs, and shorten settlement times.
However, a major issue is what currency will be used to settle these transactions. Currently, most blockchain experiments still use private stablecoins or digitized bank deposits. The ECB wants to offer a different solution based on central bank money – the currency that commercial banks use to settle accounts with each other and with the ECB.
According to the plan, starting in Q3 2026, the Pontes system will be deployed to connect blockchain financial platforms with the ECB's Target payment system – a network currently used daily by European banks to transfer trillions of euros.
The ECB stated that after more than 50 trials with financial institutions in 2024, blockchain technology is now mature enough to move into practical operation. Initially, the system will primarily serve illiquid assets such as certain types of corporate bonds, where blockchain can help make transactions faster and more flexible.
However, the ECB insists that blockchain is not intended to replace existing financial infrastructures such as Target or T2S – systems that process hundreds of thousands of transactions daily in Europe. In the initial phase, the scale of transactions via Pontes is expected to remain limited.
One of the ECB's biggest concerns is the risk of the digital financial market becoming fragmented as each bank or institution develops its own blockchain system, which may not be compatible with each other. According to Piero Cipollone, many DLT networks are currently operating in parallel but are unable to transfer assets or synchronize data with each other.
The ECB is particularly concerned about the rapid development of private initiatives in the US. Large banks like JPMorgan are developing their own digital currencies for interbank payments, while the US securities depository firm DTCC is also building asset tokenization platforms.
According to the ECB, the increasing dominance of USD-pegged stablecoins could pose a risk to Europe's monetary sovereignty if future digital financial markets become too dependent on external platforms.
In addition to Pontes, the ECB is also developing the Appia project with a larger ambition: to build a common architecture for tokenized financial markets in Europe by 2028. The goal is to enable blockchain platforms of banks and financial institutions to operate compatible with each other, avoiding market fragmentation into many separate systems.
Source: https://baotintuc.vn/kinh-te/ecb-muon-dua-dong-euro-len-blockchain-20260523092141527.htm
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