ECB Launches Dual Approach for Cross-Border DLT Integration and Payment Efficiency

Highlights:

• The ECB has approved a two-track plan to link blockchain platforms with European payment infrastructure using DLT systems.
• Pontes will connect DLT platforms to TARGET services with a pilot launch scheduled for the third quarter of 2026.
• Appia will explore global DLT use in cross-border payments while engaging both public and private sector partners.

The European Central Bank announced on July 1 that it had approved a two-track plan to support blockchain-based settlement systems. The strategy will interlink DLT with the financial infrastructure of the eurozone. It includes two approaches, Pontes and Appia, that will roll out over different timelines. Both aim to improve transaction efficiency while keeping Europe’s financial systems secure.

ECB approves DLT settlement project

The European Central Bank’s Governing Council has approved a research project to use central bank funds to settle transactions using distributed ledger technology (DLT), @CoinDesk reported. The @ecb said in a statement that "the decision is in…

— CoinNess Global (@CoinnessGL) July 1, 2025

Pontes will serve as the short-term approach, while Appia will focus on long-term developments. The ECB confirmed that these frameworks will support innovation while maintaining stability in payment and settlement systems. It emphasized the importance of preparing for changes in financial technology. These changes are already shaping how transactions occur across borders and asset classes.

ECB Launches Pontes to Link Blockchain Platforms with TARGET

Pontes will connect blockchain platforms with the Eurosystem’s TARGET services, which currently handle large-scale payments and securities transactions. The ECB plans to launch a pilot program for Pontes by the third quarter of next year. Before that, it will allow trials and experiments with DLT-based solutions to ensure system readiness.

The ECB carried out an experimental investigation among 64 respondents with over 50 experiments between May and November last year. These experiments examined the application of DLT in financial settlements. The outcomes indicated faster performance, lower cost, and less risk during transactions. With these results, the ECB justified its intentions to proceed with the advancement of DLT applications on a larger scale.

Piero Cipollone, an Executive Board member of the ECB, stated that DLT and tokenization could offer better ways to settle financial trades. He said the decision matches the ECB’s goal to support efficiency while maintaining control over market systems. Pontes will ensure that DLT platforms do not operate in isolation but stay connected to central infrastructures.

The pilot will enable the ECB to determine the compatibility of DLT systems with the current services. It will also provide time to overcome any technical or operational difficulties. Pontes will center on real-time transfer of cash, securities, and collateral within the euro area. This action would help in avoiding fragmentation and also contribute to market cohesion. Meanwhile, the ECB recently warned of the dangers that U.S. stablecoins pose to the European capital flow. The bank argues that the stablecoins could weaken the euro.

Appia to Focus on Global DLT Integration and Cross-Border Settlement

Appia will discuss the support that DLT may provide in cross-border finance activities and collaboration with global actors. The strategy will involve the integration of various markets, payment platforms, and currencies by the use of distributed technology. The ECB indicated that this stage would involve cooperation with partners in the public and private sectors.

According to the bank, Appia would also consider using DLT in foreign exchange settlement. It can open a gateway to wider interaction with international payment systems. Although the structure of Appia is still under review, the ECB confirmed it will continue its analysis in the coming years. It will use earlier test results to shape future decisions.

According to the ECB, it aims to enhance the competitiveness of the European market. Meanwhile, it intends to maintain the ownership of vital fiscal activities. Cipollone stated that Pontes and Appia represent the increased focus on blockchain in the financial industry. Both frameworks will build on previous research and recent technological developments.