ECB to Invest Own Funds in Tokenized Securities — SkimNews
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- The European Central Bank is preparing to invest a small portion of its own funds in tokenized securities, with transactions settling in central bank money through the Eurosystem's newly launched Pontes service.
- Initial purchases will focus on tokenized, euro-denominated bonds issued or recorded on a distributed ledger by euro-area governments, public agencies, and European supranational institutions.
- The ECB's own-funds portfolio — a non-monetary-policy portfolio that generates income to cover operating expenses — will fund the investments, keeping them separate from its monetary policy and supervisory activities.
- Pontes will combine three tested systems into one service, allowing settlement via cash tokens or through the Eurosystem's T2 payment system, with its Hash-Link protocol synchronizing asset transfers and payments to reduce manual processing.
- The ECB's Executive Board will determine the exact amount, operational details, and timing of purchases after preparatory work concludes, taking into account developments in tokenized issuances and Europe's broader tokenized ecosystem.
- Pontes operates alongside Appia, an initiative developing a blueprint for a tokenized financial ecosystem in Europe, as part of the Eurosystem's strategy to "make central bank money fit for the digital age."
Why it matters: By deploying its own-funds portfolio — not monetary policy tools — the ECB turns Pontes from an exploratory settlement pilot into a live investment channel for tokenized public-sector and supranational euro debt, giving euro-area issuers and market infrastructure providers a concrete signal that DLT-based government bonds now have an institutional buyer anchored to central bank money settlement.
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