ECB Advances DLT Settlement with Central Bank Money in New Innovation Push

The European Central Bank (ECB) has greenlit new research to explore how central bank money can be used to settle transactions on distributed ledger technology (DLT) platforms. The initiative aims to modernize payment infrastructure and improve cross-border financial settlements across Europe.

The ECB’s Governing Council endorsed two key strategies. The first, a short-term solution dubbed "Pontes," will connect DLT systems to the Eurosystem’s TARGET services—critical infrastructure for cash and securities transfers in the euro area. A pilot program for Pontes is scheduled to launch in Q3 2026. The second, longer-term initiative, known as "Appia," will examine global DLT integration and support scalable, secure transaction solutions.

According to the ECB, these initiatives align with its mission to drive financial innovation while maintaining high safety and efficiency standards. The bank emphasized that DLT could reduce settlement costs and mitigate credit and counterparty risks in wholesale markets.

The ECB has been actively studying blockchain-based systems, particularly for wholesale central bank digital currency (CBDC) applications. From May to November 2024, it ran a comprehensive exploratory project testing how DLT could be leveraged for settling financial instruments. The results, published this week, highlighted the technology’s potential to streamline operations and enhance resilience in financial market infrastructures.

As global central banks continue assessing the role of blockchain in modern finance, the ECB’s move underscores Europe's growing interest in harnessing DLT for real-world settlement use cases. These steps could ultimately pave the way for broader adoption of blockchain in central banking and financial services across the continent.