ECB Launches Pontes For Central-Bank Settlement Of | Crypto News
TL;DR
- The European Central Bank has launched Pontes, a wholesale settlement service for tokenized financial property.
- Pontes settles transactions in central-bank money through TARGET Services and DLT interoperability.
- The system is institutional infrastructure and is separate from the retail digital-euro project.
The European Central Bank has launched Pontes, giving establishments a new route for settling tokenized financial property in central-bank money.
The September 21 launch is a component of the Eurosystem’s effort to join distributed-ledger markets with present central-bank settlement infrastructure.
Pontes Connects Tokenized Assets To TARGET Services
Pontes is designed for wholesale financial-market exercise moderately than shopper funds.
The system hyperlinks tokenized asset platforms with TARGET Services, permitting transactions involving distributed-ledger technology to settle against central-bank money.
That distinction is important because Pontes will not be a retail digital euro and shouldn’t be understood as one.
Instead, it’s infrastructure aimed at financial establishments that need the settlement certainty of central-bank money while utilizing tokenized securities or other DLT-based market rails.
The launch builds on years of experimentation by European central banks around how present fee and securities systems can work together with blockchain-style settlement environments without forcing establishments to abandon the protections and finality of central-bank money.
Tokenization Moves Closer To Core Market Infrastructure
The significance of Pontes is less about a new token and more about plumbing.
For tokenized securities to transfer past pilots, establishments need dependable methods to exchange property and money with clear settlement finality. Pontes is meant to resolve half of that drawback from the money facet.
That makes the launch related to banks, securities issuers, market infrastructure suppliers and asset managers exploring tokenization.
The ECB’s transfer also reinforces a broader development: central banks are more and more building bridges between typical financial-market infrastructure and DLT moderately than treating the 2 as separate systems.
Pontes went live on September 21 as wholesale settlement infrastructure. It doesn’t give the public a retail central-bank digital currency, and it shouldn’t be described as a digital-euro launch.
This article was written by the News Desk and edited by Samuel Rae.
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