5 hrs ago
ECB Links Blockchain Markets With Euro-Backed Settlement Service
The European Central Bank has created a service called Pontes.
It connects regular bank payments with markets that use blockchain technology.
Blockchain is a shared digital record used to issue and trade assets.
Pontes allows transactions to be settled with euros supported by the central bank.
This means users do not have to rely on stablecoins or other private money for settlement.
Deutsche Bank, Santander and Clearstream are among the first users.
The ECB says the technology could make financial transactions faster and easier.
It will also invest a very small amount of its own money in digital securities.
Other central banks are testing similar blockchain systems.
The ECB is also working toward launching a digital euro in 2029.
The European Central Bank launched Pontes to connect its payment system with blockchain-based financial markets.
Pontes lets banks and investors settle blockchain transactions using euros backed by the ECB.
Deutsche Bank, Santander and Clearstream completed onboarding and can use the platform immediately.
The service initially operates from 8 a.m. to 4 p.m. CET on business days.
The ECB will invest a tiny portion of its €23 billion own funds in highly rated, euro-denominated digital securities.
- Who
- The European Central Bank, along with initial users including Deutsche Bank, Santander and Clearstream.
- What
- The ECB launched Pontes, a service linking its payment system to blockchain-based financial markets, and announced investments in digital securities.
- Where
- Within the European Central Bank’s euro payment system and connected blockchain-based financial markets.
- When
- The service launched on Monday; its initial operating hours are 8 a.m. to 4 p.m. CET on business days.
- Why
- The ECB says blockchain could make transactions faster and more efficient while allowing settlement with central-bank-backed euros instead of private money.
Key facts
- Service
- Pontes
- Settlement currency
- Euros backed by the European Central Bank
- Initial users
- Deutsche Bank, Santander and Clearstream
- Initial operating hours
- 8 a.m. to 4 p.m. CET on business days
- ECB own funds
- €23 billion
- Digital securities investment
- A tiny portion of the ECB’s own funds, focused on highly rated, euro-denominated debt issued by public institutions
- Digital euro target
- The ECB aims to launch a consumer digital euro in 2029
Quotes
European Central Bank
The euro area’s central bank, which launched the Pontes blockchain settlement service.
“This technology has the potential to make transactions faster and more efficient by bundling multiple steps of an asset's lifecycle... and enabling automation”
CNBC TV 18
“go on-chain”
CNBC TV 18
Sources
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