INTERVIEW | As the European Central Bank prepares to launch a pilot enabling wholesale tokenised transactions to settle in euro central bank money, George Kalogeropoulos shares the market infrastructure’s vision for the digital money era, how existing post-trade processes map onto DLT ones, and the work of the new programme manager appointed to oversee the project.
Despite the summer season, the European Central Bank faces a very busy few months. It is entering the final stages of testing its bridge linking commercial DLT platforms with its existing TARGET Services. Targeting a September launch, the Pontes project—or bridge—is designed to enable tokenised asset transactions to settle in central bank money, bringing the safety and finality of the Eurosystem to a market that has long operated at the experimental margins.
And participants are calling for it. Alongside a multi-chain network operated by financial institutions, the Association of Financial Markets Europe (AFME) envisions a role for public-sector ledgers in providing DLT-based central bank money and connecting market-run asset ledgers. AFME has called for the speedy operationalisation of Pontes to provide certainty and boost momentum for DLT-based issuance and settlement. As the body states: “For Europe to maintain its lead in creating capital markets of the future, providing certainty on DLT-based cash solutions is key—and the speedy operationalisation of Pontes is the priority.”
I caught up with George Kalogeropoulos, who shares lessons from the Eurosystem’s interoperability experiments between commercial bank DLT platforms and TARGET Services and what’s next.
User choice and the ECB’s role
As markets move rapidly towards digital assets globally, Europe’s infrastructures and market participants have been working through how to blend traditional and DLT infrastructures to give users a genuine choice. The ECB’s role goes back to 2024, when it ran trials and experiments with the market on settling real transactions across DLT and TARGET Services. “Building on that, we are now engaging with the market at full speed,” remarks Kalogeropoulos. The ECB created the Pontes Market Contact Group to engage with market participants and DLT platform operators interested in the project ahead of its initial launch.
In parallel, ECB launched a paper on Appia in March 2026 to engage the market on research, experimentation and product design, working towards a blueprint planned for 2028 for a long-term solution.
The core added value the ECB and the Eurosystem bring is enabling the European market to use DLT and move tokenised assets with the safety and efficiency of central bank money. “Sometimes central bankers may be perceived as too conservative—but we sense that the market is genuinely happy to use central bank money settlement for DLT transactions,” asserts Kalogeropoulos. “It arrives at the right moment of geopolitical tensions and global financial fragmentation, and provides certainty and safety for the European market to explore this new technology.”
Use cases
We then turn to what the ECB is doing in practice and what use cases for tokenised assets and tokenised deposits as a means of payment actually look like on the ground.
The Pontes pilot will function as an interoperability solution—an interface between tokenised assets (tokenised bonds, tokenised deposits) held outside TARGET Services and cash settlement within Pontes and T2. In practice, this can encompass many use cases, including delivery-versus-payment (DVP) in primary market operations, secondary market settlement, coupon payments and other corporate actions. From a transaction lifecycle perspective, this covers primary issuance, secondary market, redemptions and corporate actions — the full lifecycle of a standard financial instrument.
Eligible participants under the relevant regulatory regimes, including the DLT Pilot Regime and national authorisation regimes, can take part in Pontes.
Interoperability is an evolution
The ECB is a proponent of interoperability across traditional post-trade infrastructures and the emerging tokenised environment. Kalogeropoulos describes interoperability as a gradual evolution. “It is about connecting the liquidity in RTGS via the Eurosystem DLT to market DLT platforms — starting with the Pontes initial launch in September 2026, with further iterations in 2027 and 2028. Eventually, we will also need to explore how this ecosystem interplays with other TARGET Services, such as TARGET2-Securities (T2S) and the Eurosystem Collateral Management System (ECMS).”
He gives a concrete example: a supranational issuer in Europe currently issues a bond through a CSD, settling in T2S or through an ICSD in the traditional way. In future, if part of that issuance is placed on a DLT platform connected to Pontes, global issuance management and reconciliation will need to be handled between the DLT platform and T2S settlement.
The same logic applies to collateral mobilisation: an asset issued in tokenised form and eligible for Eurosystem liquidity purposes would be a highly attractive asset. The current approach requires demobilising the asset from the tokenised world and mobilising it into T2S/ECMS procedures — not ideal, but a first step. “Over time, we could explore more efficient ways of bridging the two ecosystems,” explains Kalogeropoulos. “The Eurosystem strategy is clear: we need to be in production in a timely way, support the digital transformation of the EU financial market, and evolve from there.”
Old-world and new-world processes
As tokenisation scales, Kalogeropoulos sees institutions like the ECB playing an increasingly central role, with significant implications for post-trade processes. “Beyond central bank money and settlement safety, one of the most important contributions the Eurosystem can make is fostering standardisation. There are multiple DLT platforms and initiatives today, but the market lacks clarity on which direction to go and which standards to use. This will be a key building block in our Appia Roadmap and will feature prominently in the upcoming market contact group.”
In practice, this means agreeing on communication protocols, smart contract formats and parameters for programmable payments, and even basic static data such as identification codes for relevant DLT entities — which are not yet harmonised across Europe, let alone globally. “We have extensive experience in this area from the T2S harmonisation agenda and the SCORE/collateral management standards,” says Kalogeropoulos. “The market and public authorities are consistently eager to work with the Eurosystem on harmonisation, and our concrete project milestones create momentum for everyone.”
The European shared ledger and T2S
On the relationship between the so-called European Shared Ledger and T2S or the TARGET Services more broadly, the ECB is considering several possible directions. First, the interoperability model goes live in September. Second, a distribution model—enabling tokenised central bank money to be placed on one or more DLT platforms subject to authorisation—is one option for future exploration. Third, some participants favour an integrated model, with tokenised assets and tokenised cash on a single network, similar to T2S today.
Kalogeropoulos believes each has merits and trade-offs. “Committing to only one direction risks crowding out parts of the market, so we are starting with the simpler interoperability model, building experience, and will make clearer directional decisions as we work towards our 2028 blueprint.”
“What we bring today centres on creating a safe, production-grade environment where issuers and investors can feel reassured to explore new business models in Europe. For a major issuer bringing a systemically relevant asset issuance to a DLT platform — settling against the risk-free settlement asset of central bank money, within the operational resilience of TARGET Services — that provides, I would argue, a major added value.”
Technology and infrastructure: today versus tomorrow
While the ECB’s innovation in distributed infrastructure goes back to T2S some twenty years ago, what has changed most dramatically is cost: cloud computing and expanded data centre capacity now allow market participants to set up systems and processes at far lower marginal operational cost than before.
Kalogeropoulos sees programmability and smart contracts as key expected benefits. “By standardising smart contracts and deploying them across platforms, you can enhance efficiency significantly,” he explains. “Instead of exchanging standard messages to check record dates and investor data, a smart contract can be set to trigger a payment automatically when pre-defined conditions are met. This programmability—and particularly decentralised programmability, where users initiate contracts in agreed standardised formats without the need for a centralised agent — is one of the most important developments in this space.”
There is also an expectation of reduced need for reconciliation, since participants on the same network do not need to replicate positions and holdings across the full transaction chain. Some degree of reconciliation will of course remain, so long as distinct legal entities exist across the chain and regulatory requirements—such as end-of-day records—persist. Europe’s multi-jurisdictional environment would most likely require some reconciliation to survive even the most advanced decentralised solution.
As the project approaches its live date, the ECB will appoint a new programme manager to lead its work on the tokenisation of wholesale central bank money. In addition to ensuring a successful go-live of the Pontes project, they will play an active role in consolidating and orchestrating private-public collaboration—on standardisation, interoperability, governance and the path to the 2028 blueprint. “The new programme manager will need to help shape that collaboration in a structured, effective way, working closely with the market,” notes Kalogeropoulos.
The ECB is also consolidating its two contact groups—the Pontes Market Contact Group and the New Technologies for Wholesale Settlement Contact Group (NTW-CG)—into a single market contact group, reflecting the unified programme that encompasses both Pontes operations and Appia exploration.
