An Alternative to Stablecoins from the European Central Bank: Who Will Be Able to Use the New System?
The European Central Bank has launched the Pontes platform, allowing banks to settle payments for financial asset transactions on the blockchain using central bank money. The system is not open to consumers, but to financial institutions that meet the participation criteria.
According to a report by CoinDesk, the European Central Bank (ECB) launched Pontes on Monday, September 21. The platform connects the payment side of buying and selling bonds, funds, and other financial assets represented on the blockchain to central bank money. Thus, a new payment option is offered to institutions alongside stablecoins or tokenized commercial bank deposits.
Who will be able to use Pontes?
Only eligible financial institutions and market infrastructure providers will be able to access the system. No new coin for individual investors or a public digital euro wallet has been launched.
Pontes connects market platforms using distributed ledger technology to the Eurosystem’s TARGET Services infrastructure. Through this connection, participating banks can settle the cash payment for inter-institutional transactions of tokenized assets using central bank money.
ECB President Christine Lagarde announced the system’s launch at Friday’s Eurogroup meeting. This infrastructure, which Lagarde summarized as a digital euro for banks, is intended for banks to conduct transactions between each other using tokenized assets.
In which area is it an alternative to stablecoins?
The transfer of a bond or a fund share on the blockchain requires the payment of its price. The option introduced by Pontes applies to this cash payment leg: Institutions will be able to use central bank money without having to rely solely on stablecoins or tokenized forms of commercial bank deposits. This does not mean that stablecoins are banned or that Pontes has replaced all use cases.
The ECB aims to maintain the role of central bank money in European financial markets where more and more assets are being tokenized. Pontes is planned to be developed in stages and to proceed alongside the longer-term institutional tokenization initiative, Appia.
The retail digital euro is a separate project
The retail digital euro for consumers is being managed separately from Pontes. In July, the ECB selected 36 banks and payment companies to participate in the pilot of this project. The one-year pilot is scheduled to begin in the second half of 2027 and is planned to test person-to-person online and offline transfers, as well as in-store and e-commerce payments.
The necessary legislation for the retail digital euro is still being discussed in the European Parliament. The target of a possible issuance in 2029 mentioned in the source is not a finalized rollout date. The launch of Pontes today does not mean that the consumer digital euro has gone live.