At Jackson Hole on August 28, ECB Executive Board member Isabel Schnabel delivered one of the most direct central-bank statements on tokenization yet: central-bank money on blockchain is no longer optional.
Schnabel argued that if public money stays off-chain while financial assets move on-chain, dollar stablecoins will become the default cash leg, threatening European monetary sovereignty.
Pontes Launches in September: What It Means
The ECB is not waiting. Pontes, the Eurosystem’s near-term bridge infrastructure, is set to pilot in September 2026.
It connects market distributed ledger technology (DLT) platforms directly to TARGET Services, the Eurosystem’s existing payment rails. Crucially, Pontes is not just a bridge.
It will feature a Eurosystem-operated DLT platform for settling tokenized transactions in central-bank money on blockchain rails.
Settlement finality will ultimately sit on that Eurosystem DLT layer, not just in T2 as before. Smart contracts are already on the roadmap for Pontes, alongside 24/7 operations.
That matters for funds holding tokenized collateral, since automated margin calls and collateral substitution in real time require both the asset and the settlement token to live on the same programmable layer.
Schnabel’s speech, delivered alongside a paper by Stanford’s Darrell Duffie, drew a clear line on stablecoins.
They are complements, not substitutes, useful for payments at the edge, but unable to expand liquidity elastically in a crisis.
That elasticity is what makes central-bank reserves unique. Platforms already pushing tokenized government liquidity funds into Asia will need a euro-denominated risk-free cash token to match what dollar rails already offer.
The ECB ran 2024 DLT settlement trials with 64 participants across nine jurisdictions, settling approximately €1.6 billion in central-bank money.
Appia, the BIS, and the Euro vs. Dollar Stablecoin Split
Beyond Pontes, the ECB’s long-term blueprint is Project Appia. A contact group of 61 institutions begins work in September 2026.
The architecture debate is live: a single unified European ledger, or a network of interoperable ledgers? Each has trade-offs.
A unified ledger delivers strict atomic settlement but raises governance questions, who is liable if a smart contract fails? Interoperable ledgers spread risk but fragment liquidity.
Hours after Schnabel spoke, BIS General Manager Pablo Hernández de Cos reinforced the same position.
Stablecoins are not a credible large-scale payment instrument, and tokenized deposits are the cleaner private-money path, so long as they still settle in central-bank money on blockchain.
The BIS and ECB are aligned on a three-layer stack: tokenized reserves, then tokenized deposits, then regulated stablecoins for edge use cases.
That framing creates a ceiling for euro stablecoin issuers like Revolut’s EURR, useful for payments, but not the final settlement layer.
The contrast with Washington is sharp. The US is advancing regulated dollar stablecoins under the GENIUS Act stablecoin framework while blocking a retail CBDC.
Europe is doing the opposite: building public on-chain reserves and treating private stablecoins as a complementary layer. The dollar-stablecoin central-bank money on blockchain race is now a macro story, not just a fintech one.
For RWA investors, the immediate implication is settlement infrastructure. Platforms trading tokenized stocks or tokenized commodities need a euro risk-free cash token for DvP settlement.
Pontes, once live, will be that token. Meanwhile, the on-chain RWA demand surge shows the market is not waiting for perfect architecture, it is building now.
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