European Central Bank (ECB) Considers Direct Issuance, Bridges, Private Tokens For On-Chain Reserves

The European Central Bank (ECB) has outlined three distinct ways to make central-bank money available on programmable networks, arguing that the safest settlement asset should remain accessible as markets move toward tokenized securities, deposits, and stablecoins.

Executive Board member Isabel Schnabel presented the framework on 1 October 2026 at the Bank of England and London School of Economics conference “The Future of Money,” held in London in honor of economist Charles Goodhart.

The accompanying slides, titled “Central banks on-chain,” frame tokenization as a shift that can make settlement both conditional and simultaneous.

Under programmability, a transfer can be tied to rules that execute automatically.

Under atomicity, the cash and asset sides of a trade either complete together or do not complete at all.

Schnabel’s stated aim is to keep central-bank money as the settlement anchor in that environment, rather than leave the role entirely to private instruments.

The slides distinguish public settlement assets from private ones.

On the public side sit wholesale central-bank digital money, pursued through the Eurosystem’s Pontes and Appia initiatives, and a possible retail digital euro.

On the private side sit tokenized bank deposits and stablecoins, which would circulate alongside tokenized bonds, equities, and other instruments.

The presentation argues that a tokenized system can still reproduce today’s two-tier monetary structure if central bank money is supplied on-chain: commercial banks would continue to issue claims to customers, while those claims would rest one-for-one on central bank money.

The three models differ in who issues the on-chain claim and whether reserves themselves leave existing systems.

In the first, direct issuance, the central bank would operate a programmable platform and issue reserves as native tokens on that ledger.

Participants would hold a direct claim on the central bank in token form, and reserves would exist on the distributed ledger rather than only in conventional accounts.

In the second, bridging or synchronization, reserves would stay inside the existing real-time gross settlement system and would not be tokenized.

An interoperability layer would connect that system to external distributed-ledger platforms through triggers and hash links, so that the cash leg and the asset leg could be coordinated without moving the reserves themselves onto the new infrastructure.

In the third, a private intermediary would hold reserves at the central bank and issue settlement tokens fully backed by those reserves.

The tokens would be private claims, not direct liabilities of the central bank, and the underlying reserves would remain off-chain.

Pontes, launched on 21 September 2026, is presented as a practical combination of the bridge approach with a Eurosystem-operated distributed ledger.

It offers dual settlement, either through TARGET2 or on the Eurosystem ledger, for wholesale transactions in tokenized assets.

Planned later steps include round-the-clock availability and more decentralized programmability.

A longer-term initiative, Appia, is described as exploring several architectures, from a single shared ledger to interconnected networks and multiple shared ledgers that could carry wholesale central-bank money alongside securities, deposits, and stablecoins.

The presentation does not select one model as final. It treats them as alternative routes for preserving the settlement role of central-bank money while commercial banks continue to intermediate customer balances.