ECB launches blockchain link for financial market transactions

The European Central Bank launched Pontes on Monday, linking its payment system to blockchain-based financial markets. The service allows banks and investors to settle blockchain-based transactions using euros backed by the ECB rather than stablecoins or other forms of private money. Deutsche Bank, Santander and Clearstream were among the first users to complete onboarding and will be able to use Pontes from the start. The platform will initially operate from 8 a.m. to 4 p.m. CET, or 0600 to 1400 GMT, on business days, and the ECB said it would expand its services over time. The ECB said blockchain technology could make transactions faster and more efficient by combining multiple steps in an asset's lifecycle and enabling automation. The central bank also said it would begin investing a tiny part of its 23 billion euros in own funds in blockchain-based securities, focusing on highly rated, euro-denominated debt issued by public institutions. Last month, ECB board member Isabel Schnabel said central banks should move on-chain because this would reduce reliance on private alternatives. The Swiss National Bank is running Project Helvetia, which uses a wholesale digital currency to settle securities transactions, while the Bank of England is testing blockchain through its Digital Securities Sandbox. The ECB is also working on a digital euro for consumers, partly to reduce the bloc's reliance on US credit cards, and aims to launch it in 2029.