The European Central Bank (ECB) has approved a program aimed at investigating distributed ledger technology (DLT) in payment systems and settlements using central bank money.
Brief Details of the Pontes Approach
The Pontes model aims to integrate DLT platforms with existing Eurosystem TARGET services, enabling real-time cash and securities flows.
The pilot project, scheduled for the third quarter of 2026 with a limited number of participants, will represent the first concrete initiative linking standard central bank money accounts to a DLT environment. As a result, banks will be able to trade blockchain-based assets without disconnecting from traditional RTGS channels.
According to impact analysis conducted by the ECB, this framework holds the potential to reduce settlement and credit risks while lowering operational costs.
Global Perspective with Appia
The Appia initiative presents a more comprehensive approach than Pontes by addressing the international dimension of DLT-based settlements. Through Appia, the ECB will examine payment models both within and beyond Europe, meticulously testing scalability, interoperability, and compliance standards.
The report emphasizes the importance of testing the resilience of DLT under real market conditions, which implies gradual integration and stringent risk controls. Appia’s main objective is to accelerate global fund flows while maintaining systemic security, offering investors lower transaction fees and high transparency.
Conclusion on DLT and Payment Systems
The launch of the Pontes and Appia programs is considered a critical step towards accelerating payment systems in Europe and reducing costs. The ECB emphasizes the principle of 'innovation without compromising security,' highlighting the importance of these investigations for enhancing Europe's competitiveness on the international stage.
Together, the Pontes and Appia initiatives could significantly alter the landscape of payment systems in Europe, facilitating more efficiently managed financial flows and reducing costs for banks and customers.
