By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Piero Cipollone on Wednesday said the Eurosystem plans to launch its Pontes service for settling tokenized transactions in central bank money this year, with 24/7 operation and multi-currency capability envisaged by mid-2028.

"This year, we intend to deliver on what we said by going live with Pontes," Cipollone said in a speech at a Deutsche Bundesbank symposium in Frankfurt.

To support early adoption, Pontes will initially charge only one-off onboarding fees, Cipollone said. The service will connect market distributed-ledger-technology platforms with the Eurosystem's TARGET Services, allowing final settlement of the cash leg in central bank money, he said.

The Eurosystem then plans gradually to extend Pontes operating hours to 22.5 hours per business day and offer immediate settlement finality in its DLT, before moving to 24/7 service, greater programmability, enhanced resilience and multi-currency capability by mid-2028, he said.

Cipollone said Pontes and the broader Appia project should be seen as two parts of the same strategy, with Appia addressing the architecture, standards and governance of a European tokenized financial ecosystem and aiming to produce a blueprint in 2028.

Appia will assess alternative architectures including a single shared European network, multiple interconnected networks or combinations of the two, without the Eurosystem having predetermined the outcome, he said.

Cipollone warned that tokenization could either help overcome the fragmentation of European capital markets or create a new collection of incompatible platforms, while reliance on private settlement assets could weaken the monetary anchor and dependence on infrastructures controlled outside Europe could create strategic vulnerabilities.

The Eurosystem therefore wants central bank money to remain at the core of tokenized finance while fostering an integrated, competitive European payments and securities ecosystem and preserving Europe's resilience and strategic autonomy, he said.

Cipollone said interoperability would require more than simply connecting different DLT platforms, with assets needing to retain consistent rights and obligations and transactions requiring legal as well as operational finality.

He said Europe also needed greater legal clarity and harmonization covering the status of tokenized assets, ownership rights, settlement finality, liability, custody, asset servicing and the enforceability of smart-contract outcomes.

Common standards, public-private cooperation and an integrated legal framework would be necessary for tokenized finance to move beyond isolated pilots and achieve broad adoption, Cipollone said.

He warned that if Europe waited too long, "fragmentation may become entrenched."