Speech by Piero Cipollone, Member of the Govt Board of the ECB, on the Deutsche Bundesbank’s Symposium on “Way forward for funds: tendencies and improvements in Germany and Europe”[1]
Frankfurt am Primary, 26 August 2026
Two years in the past, at this exact same Symposium, I argued that Europe had a novel alternative.[2]
Tokenisation and distributed ledger know-how, or DLT, have been starting to reshape monetary markets. By representing and transferring belongings within the type of programmable information recordsdata – tokens – they provided the prospect of creating finance extra environment friendly, enabling it to function across the clock with higher automation and fewer intermediaries.
On the coronary heart of this transformation lies a Copernican revolution. Tokenised belongings will likely be on the centre of a brand new digital finance ecosystem that permits issuers, traders and intermediaries to suppose anew and innovate.
However this transformation additionally poses a threat: a proliferation of incompatible platforms might reproduce, and even deepen, the present fragmentation of Europe’s capital markets.
I due to this fact outlined a imaginative and prescient for constructing an built-in and dynamic European ecosystem for digital belongings from the outset, with central financial institution cash at its core. Since then, we’ve got moved from imaginative and prescient to supply. And right now, I’ll focus on the subsequent steps in turning that imaginative and prescient into actuality.
I’ll first recall the targets we set ourselves and why they continue to be our cardinal factors. I’ll then clarify the progress we’ve got made, particularly by way of our Pontes and Appia tasks. Lastly, I’ll define the situations for achievement, specifically what it should take to show technological turn into a real transformation of finance in Europe.
The imaginative and prescient: an built-in European marketplace for digital belongings
The promise of tokenisation is just not merely that current processes will turn into quicker, however that it’s going to allow us to simplify the structure of finance itself.
That is notably related in Europe, the place capital markets stay deeply fragmented regardless of some current progress in direction of integration.[3] The EU now has 31 central securities depositories (CSDs), 14 central counterparties (CCPs) and 323 buying and selling venues.[4] And whereas some bigger teams cowl the worth chain – encompassing buying and selling, clearing, settlement and asset servicing – cross-border settlement stays restricted. Securities are nonetheless predominantly held and settled inside native CSDs. Even in CSDs belonging to the identical group, most transactions are settled inside particular person CSDs within the group, with restricted cross-border transactions. In 2023 greater than 95% of transactions in each quantity and worth phrases have been settled between events in the identical particular person CSD.[5]
So how can tokenisation assist simplify our monetary ecosystem and make it extra environment friendly?
At present, the lifecycle of a monetary asset usually includes a succession of infrastructures and ledgers. Issuance, buying and selling, clearing, settlement, custody and asset servicing might all happen in numerous programs. Every step requires info to be transmitted, verified and reconciled.
Tokenisation might carry a number of of those features right into a shared digital setting. Transactions may very well be executed conditionally and atomically, which means that the money and asset legs are both settled collectively or under no circumstances. Sensible contracts might automate processes starting from coupon funds to collateral actions and compliance checks.
Tokenisation is due to this fact not merely an incremental enchancment to 1 stage of a monetary transaction. As a substitute, it has the potential to reorganise the whole monetary worth chain.
This reorganisation gives a chance for Europe. If we design and construct an built-in European marketplace for tokenised belongings from the outset, the digital finance transformation will enable us to leapfrog the fragmentation of current legacy programs.
However know-how alone won’t decide the end result.
The identical know-how can assist an built-in market or a set of closed platforms. It may decrease limitations to entry or create new gatekeepers. It may foster competitors or entrench technological dependencies.
That is now not a purely hypothetical query. Globally, tokenised finance is transferring from experimentation to early adoption, as institutional gamers more and more concentrate on tokenising conventional monetary devices.
Whereas nonetheless small, the figures level to real momentum.
Worldwide, tokenised conventional belongings recorded on public blockchains elevated roughly fivefold between March 2025 and March 2026.[6] In some segments, exercise has already reached significant operational scale. In the USA, one non-public platform processed a mean of USD 354 billion in tokenised repo transactions per day in March 2026, 4 occasions the typical each day quantity it recorded a 12 months earlier.[7]
In Europe, adoption is progressing and European establishments are growing tokenised bonds, deposits, collateral and settlement options. European CSDs have additionally introduced main initiatives to tokenise securities on a big scale, matching related initiatives in the USA. And in March, we began accepting marketable belongings issued through DLT-based providers at European CSDs as eligible Eurosystem collateral.[8]
In contrast with the scale of worldwide markets, tokenised real-world belongings stay tiny, with restricted liquidity and secondary market exercise. However we’re at a crucial juncture. The market is sufficiently superior for the alternatives to be tangible, however nonetheless younger sufficient for Europe to form its structure and overcome coordination challenges.
In doing so, we have to keep away from three dangers.
The primary is fragmentation. Incompatible networks might doubtlessly divide belongings, liquidity and members into separate ecosystems. This could disperse exercise throughout platforms that will not talk with one another, fragmenting liquidity.
The second threat is the lack of the financial anchor. With out entry to central financial institution cash, tokenised markets might turn into reliant on non-public settlement belongings which carry credit score and liquidity dangers and don’t have the identical capacity to scale elastically.
The third threat is exterior dependence. Europe might turn into reliant on infrastructures, applied sciences, governance preparations or settlement belongings managed outdoors Europe.
The query is due to this fact now not whether or not tokenised finance is rising, however whether or not it should develop as an built-in and aggressive market in Europe, or as a set of disconnected technological islands that fail to scale up and compete globally.
The Eurosystem’s targets are clear. We need to provide settlement of DLT transactions in central financial institution cash, offering a secure asset and a financial anchor on which tokenised finance can develop. We need to foster an built-in, aggressive and revolutionary European funds and securities ecosystem, which might additionally assist the euro’s attractiveness globally. And we need to protect Europe’s resilience and strategic autonomy.[9]
The progress: from experimentation to implementation
Two years in the past, I argued that public authorities wanted to behave early, earlier than fragmentation turned entrenched.
Now we have acted, and we’ve got moved at tempo.
The EU co-legislators are discussing the legislative proposal to increase and improve the DLT Pilot Regime. On the similar time, the European Fee has launched a session to evaluate whether or not and the way the Markets in Crypto‑Property Regulation ought to be fine-tuned, drawing on the expertise gained in its first years of software.
The Eurosystem can be making fast progress. Its first step was to evaluate the market’s wants and take a look at attainable technological options.
In 2024 we introduced collectively 64 market members in additional than 50 trials and experiments. This work confirmed that central financial institution cash can be utilized to settle transactions performed on DLT platforms. It additionally confirmed that entry to central financial institution cash is just not a secondary consideration for the market, however one of many situations for tokenised finance to develop safely and at scale.[10]
Now we have remodeled these findings right into a coherent technique, which we’re implementing by way of two complementary tasks: Pontes and Appia.
Pontes will flip our dedication to supply central financial institution cash for settling tokenised transactions into an operational service.
It is going to join market DLT platforms with the Eurosystem’s TARGET Providers. Ultimate settlement of the money leg will happen in central financial institution cash. And synchronisation will allow supply versus cost and different transactions that require all-or-none settlement.
In 2024 we mentioned that tokenised markets wanted entry to central financial institution cash. This 12 months, we intend to ship on what we mentioned by going reside with Pontes. To assist its early adoption, we are going to provide enticing pricing situations, charging solely one-off onboarding charges for the preliminary launch.[11]
We’ll then progressively improve the service by extending working hours to 22.5 per enterprise day and providing fast settlement finality within the Eurosystem DLT.[12] By mid-2028, we plan to supply a 24/7 service in addition to higher programmability, state-of-the-art resilience and multi-currency functionality.
Pontes issues, as a result of confidence in a settlement asset is just not one thing that know-how can manufacture. Central financial institution cash doesn’t carry credit score or liquidity threat. What’s extra, it serves because the frequent settlement anchor throughout the monetary system.
By making central financial institution cash obtainable for DLT-based transactions and bringing central financial institution cash on-chain, Pontes will present market members with a firmer foundation for investing, innovating and scaling up. On the similar time, it should generate precious operational expertise that may be taken under consideration when designing the long-term ecosystem.
However offering central financial institution cash is a mandatory, not a adequate situation for increasing and integrating digital finance in Europe.
That’s why we launched Appia.
Appia addresses the broader structure, requirements and governance of a European tokenised monetary ecosystem. The roadmap we revealed in March combines analytical work with sensible experiments and shut cooperation between the market and public authorities.
The work performed as a part of the Appia roadmap covers asset interoperability and requirements, financial coverage implementation and collateral administration, the longer term infrastructure for tokenised central financial institution cash, cross-border transactions, in addition to the ecosystem’s authorized and regulatory framework, and basis for resilience. It goals to ship a blueprint for an built-in, European tokenised monetary ecosystem in 2028.[13]
Put merely, Pontes builds bridges by providing digital finance a secure settlement asset and by making non-public settlement belongings mutually convertible – enabling, for instance, tokenised deposits to be transferred between banks or stablecoins to be settled in fiat foreign money immediately through DLT.
Appia paves the way in which for a single European marketplace for tokenised belongings, however we’ve got not predetermined what the structure for that can truly seem like.
On the one hand, a single shared European community would keep away from fragmentation and would mutualise infrastructure prices. Then again, a number of interconnected networks would assist innovation and resilience on the infrastructure degree. Nonetheless, these networks would require a excessive diploma of interoperability to keep away from the fragmentation of belongings and liquidity. Combos of those approaches would even be attainable.
Appia will due to this fact assess the options in opposition to our targets for integration, competitors, resilience, innovation, governance, strategic autonomy and the flexibility for the Eurosystem to set and implement the foundations relevant to central financial institution cash.
Pontes and Appia shouldn’t be seen as separate tasks, however as two elements of 1 technique.
Appia’s findings will feed into the gradual enhancement of Pontes. On the similar time, the operational expertise gained from Pontes will inform the alternatives made underneath Appia.
We’re combining fast supply with long-term ambition. We’re studying by doing, whereas guaranteeing that every operational step takes us nearer to a dynamic, built-in and aggressive European market.
The trail to scale: the situations for achievement
This brings me to the situations for achievement.
Interoperability based mostly on frequent requirements and guidelines
The primary situation is interoperability throughout DLT platforms based mostly on frequent requirements and guidelines. This can allow traders to entry the overwhelming majority of tokenised belongings and providers by becoming a member of just one or just a few DLT networks. For that reason, the revised DLT Pilot Regime proposed by the Fee requires the trade to determine technical requirements that assist interoperability between DLT market infrastructures.
To attain interoperability, connecting two ledgers is just not sufficient. The belongings should imply the identical factor on each ledgers, rights should nonetheless be enforceable, the foundations set by issuers should nonetheless apply, and transfers should obtain authorized and operational finality.
A genuinely built-in tokenised ecosystem should due to this fact have 5 capabilities.
Methods have to be interoperable in order that they will trade and perceive trusted directions and transaction states.
Property have to be transferable, with legitimate authorisation, compliance and settlement finality.
They need to even be moveable, and their identification, rights, obligations and historical past have to be preserved after they transfer between platforms.
They need to stay controllable, in order that issuers and public authorities can train the powers required in regulated markets.
Lastly, they need to be programmable, permitting automation to develop inside a secure, legally legitimate and governable framework.
Reaching these capabilities requires greater than technical protocols. It requires coordination throughout infrastructure, identification, information, asset illustration, transaction mechanisms, governance, threat controls and supervision.
Europe’s expertise with SEPA and TARGET Providers teaches us that integration requires frequent requirements, harmonised practices and shared guidelines.
We must always construct on mature trade and worldwide requirements the place they exist, moderately than duplicate them, however we should additionally be certain that they’re adopted persistently and fill within the remaining gaps.
Our fast priorities ought to embrace mechanisms for transferring money and securities tokens between platforms, suitable requirements for representing these tokens, and customary reference information that enable belongings and lifecycle occasions to be interpreted persistently.
This doesn’t imply imposing a one-size-fits-all in the marketplace. As a substitute, it means guaranteeing that completely different options can work together and compete on the identical market. That is a necessary situation for tokenised finance to attain scale and be extensively adopted, as was the case for electrification, when the related effectivity good points relied on the regulatory and standardisation decisions made within the early twentieth century.[14]
There ought to be competitors in providers, high quality and worth, not by way of incompatible requirements or walled gardens.
A public-private partnership to drive adoption
The second situation is public-private cooperation that can result in coordinated adoption.
Tokenisation is a system-wide innovation. Its advantages will solely totally emerge if issuance, buying and selling, settlement, custody, collateral and asset servicing all develop alongside one another.
Issuers want traders and liquid secondary markets. Buyers want dependable custody, settlement and asset servicing. Market-makers want efficient repo and collateral preparations. And all members want authorized certainty and entry to a trusted settlement asset.
If every actor waits for the opposite to play their half, tokenisation might stay confined to profitable however remoted pilot schemes.
The general public sector can present the financial anchor and set up a supportive European regulatory framework. However the market should present the belongings, the providers and the innovation.
Collectively, we should always not simply coordinate experiments, however goal to create the situations for widespread adoption, making it attainable to reap complementarities throughout traders, issuers and intermediaries and enabling the market to scale up.
This can be a joint endeavour that includes market members, public authorities and members of academia. In Appia, we are going to collectively conduct focused experiments, develop and take a look at requirements, and pursue sensible work on asset transfers and collateral mobility. All through this course of, we are going to search steady suggestions from Pontes customers.
An built-in authorized framework
The third situation is a authorized framework matching our technological ambition.
Superior know-how can’t compensate for fragmented regulation.
If an asset can transfer technically from one platform to a different however its possession standing turns into unsure within the course of, it isn’t genuinely moveable.
If a transaction is synchronised in code however its finality is just not recognised throughout jurisdictions, it isn’t genuinely settled.
Technical interoperability with out authorized compatibility will stay incomplete and fail to beat fragmentation. Whereas the improved DLT Pilot Regime requires requirements to make sure technical interoperability and seeks to open the market to new gamers, we have to present the authorized foundations for tokenised belongings to be issued, held and transferred seamlessly throughout the EU.
Europe due to this fact wants higher readability and harmonisation on the authorized standing of tokenised belongings, possession rights, settlement finality, legal responsibility, custody, asset servicing and the enforceability of smart-contract outcomes. In any other case, we threat constructing superior digital rails on fragmented authorized foundations.
The three situations I’ve described are intently linked. Widespread requirements make interoperability attainable. Public-private cooperation turns interoperability into adoption. And authorized certainty permits adoption to happen safely and throughout borders.
Conclusion
Let me conclude.
Two years in the past, I argued that Europe had a novel alternative to construct an built-in capital marketplace for digital belongings from the outset.
At present, we’re delivering on that imaginative and prescient.
Pontes is popping the settlement of tokenised transactions in central financial institution cash into an operational actuality. Appia is popping a long-term ambition right into a public-private roadmap.
However the subsequent step will likely be decisive. We have to flip technological connectivity into real market integration. That requires frequent requirements, interoperable belongings, open entry, efficient governance and authorized certainty. To create these situations, public authorities and market members must work collectively.
If we wait too lengthy to take motion, fragmentation might turn into entrenched. If we act now, we are able to do extra than simply modernise settlement. We will use technological change to assist construct one thing Europe has sought for many years: a deeper, extra revolutionary and extra aggressive capital market.
The imaginative and prescient is obvious. The foundations are being constructed. And on these foundations we are able to construct the way forward for European finance. Collectively.
Thanks.
