ECB’s Cipollone Details Bank Roles in Pontes and Appia Ecosystem

Piero Cipollone, a member of the European Central Bank’s Executive Board, set out how banks can participate in the Eurosystem’s tokenised financial ecosystem in a speech to the Italian Banking Association on 21 October 2026, following the 21 September 2026 launch of the Pontes settlement solution. Cipollone said tokenisation is moving from experimentation to early adoption, and he detailed the connection routes available under the EU DLT Pilot Regime and the channels through which banks can help design the Appia initiative.

Cipollone pointed to several markers of that shift. Since the launch of Pontes, distributed ledger technology (DLT) transactions can be settled in euro central bank money, and since March 2026, DLT-based assets issued in central securities depositories (CSDs) can be mobilised as eligible collateral in Eurosystem credit operations. Engagement with European sovereign issuers indicates significant interest in exploring tokenised issuance, he said, noting that Eurogroup+ issued a statement on digital finance on 9 July 2026 and that European CSDs have launched services for DLT-issued securities that operate alongside existing infrastructure. The trend is not confined to Europe, he added, citing SEC staff no-action relief from December 2025 that allows DTCC to tokenise existing securities for three years.

Tokenisation Across the Financial Value Chain

Cipollone described tokenisation as covering the whole financial value chain, from trade execution and clearing to settlement and asset servicing. He listed as its main benefits 24/7 seamless transactions, automation through smart contracts, the synchronous exchange of assets, and a single source of truth that removes the need for reconciliations.

For primary markets, he cited lower issuance costs from fewer intermediaries and manual processes, wider SME access to capital markets in support of the savings and investments union, and fractional ownership broadening the investor base. For trading and post-trade, he cited atomic delivery-versus-payment, in which asset and cash are exchanged on an all-or-nothing principle via programmable smart contracts, reduced counterparty and settlement risk with shorter cycles, and a safe settlement asset anchored in central bank money through Pontes. For asset servicing and collateral, he cited automated coupons, redemptions and corporate actions, and faster intraday collateral mobility with smaller liquidity buffers.

Cipollone said the current ecosystem of issuer CSDs, local custodians and global custodians produces higher costs and shallower, less liquid markets, calling it a key obstacle to the savings and investments union and warning that tokenisation could add a new layer of fragmentation. He presented shared and interoperable DLT networks based on European standards as the alternative, with common standards, central bank money as the safe settlement asset and European strategic autonomy as the stated objectives, and integrated European capital markets as the stated opportunity.

The Eurosystem acts in three core areas, he said. As issuer of central bank money, it offers a risk-free settlement asset in tokenised wholesale finance that complements private settlement assets. As provider of liquidity against collateral, it makes tokenised assets eligible as collateral so they can be mobilised in monetary policy operations. As catalyst for an integrated ecosystem, it supports a competitive, defragmented and innovative payments and securities ecosystem through efficient infrastructures and common market standards. The three roles map to Pontes, DLT asset eligibility and Appia respectively.

Connection Routes Under the EU DLT Pilot Regime

Since March 2023, under the EU DLT Pilot Regime, a CSD licence has not been required to settle and record tokenised securities, and Pilot Regime infrastructures can connect to Pontes to settle in central bank money. The regime in force provides for three types of infrastructure. A DLT multilateral trading facility handles trading and can be operated by investment firms, including banks authorised to provide investment services, and by market operators; investors can trade directly on their own account without an intermediary, subject to conditions, and the venue benefits from an exemption from transaction reporting. A DLT securities settlement system handles settlement and recording, is operated by CSDs, allows securities to be recorded directly on DLT without book entry, subject to conditions, and permits payment in central bank money where available and otherwise in commercial bank money or e-money tokens. A DLT trading and settlement system combines trading, settlement and recording, is open to investment firms, market operators and CSDs, and offers full vertical integration of exchange and post-trade processing in a single venue.

The market integration and supervision package proposes two additional roles. A DLT Notary would perform the initial recording and central maintenance function, allowing the issuance of securities on DLT without a CSD licence. A DLT Account Keeper/settlement scheme would allow settlement of DLT-based securities without a CSD, a DLT securities settlement system or a DLT trading and settlement system. Both proposed roles would be open to investment firms, regulated markets, credit institutions, CSDs or CASPs.

Cipollone framed the model as a public-private partnership in which the public sector provides the anchor for trust and the framework needed for the market to scale up safely, while the market provides innovative services. Pontes is now live, and user experience and feedback will guide its further development, he said. Through the Appia initiative, launched in 2025, the Eurosystem is examining how central bank money and collateral services could be provided via different DLT networks. Engagement channels include the Appia Contact Group, joint work on European standards for the tokenised ecosystem, public consultations, with a summary of feedback on the Appia roadmap to be published, and focus sessions to keep the wider market and general public informed. From 2027, market participants will be invited to contribute to practical work and the joint design of the Appia blueprint, which is to be published by 2028.

The Eurosystem launched Pontes on 21 September 2026 as the first initiative under its strategic programme for tokenised finance. An initial group of market participants, including Deutsche Bank (DB ), Santander, Société Générale, the European Investment Bank and KfW, and DLT operators Axiology, Cashlink, Clearstream and SWIAT, completed onboarding at launch, with the Deutsche Bundesbank also onboarded in a market participant capacity. Pontes initially offers a core set of services, with enhanced features and longer operating hours to be introduced gradually and full implementation expected by 2028. The Eurosystem published the Appia roadmap on 11 March 2026, building on exploratory work conducted between May and November 2024 in which 64 market participants took part in more than 50 trials and experiments, and on a plan announced by the ECB’s Governing Council in July 2025 to define a strategic way forward. Appia’s development involves the Eurosystem, Danmarks Nationalbank and stakeholders from the public and private sectors, with the goal of delivering a blueprint by 2028.