The Eurosystem has launched Pontes, its new service allowing transactions in tokenised securities to settle in central bank money, with Chatsworth client Axiology among the four DLT market infrastructures live at launch.

The Financial Times described the launch as the digital euro making its debut in wholesale financial markets, with The Economist also covering the development as Europe builds out its digital capital markets.

As the Financial Times reported, most stablecoin activity today is denominated in US dollars and much of Europe’s existing payments infrastructure relies on American companies.

This has increased the focus on building infrastructure that can support euro-denominated digital markets and strengthen Europe’s autonomy over the systems they rely on.  

Pontes is part of this response, connecting DLT-based market infrastructures with the Eurosystem’s existing TARGET Services and giving tokenised securities access to central bank money for settlement. It brings private-sector innovation into the infrastructure already underpinning the European financial system.

Axiology is live alongside Clearstream, SWIAT and Cashlink, following the development of its regulated DLT Trading and Settlement System under the EU DLT Pilot Regime.

The initial Pontes group also includes 13 financial institutions, among them Deutsche Bank, Santander, Société Générale, the European Investment Bank and KfW.

The launch comes as the UK develops tokenised markets through its Digital Securities Sandbox and work on central bank money settlement, and the US continues to develop its own digital asset and tokenised securities infrastructure.

Europe now has live infrastructure supporting its ambitions for tokenised capital markets.

Congratulations to the Axiology team on being part of an important milestone for European capital markets.