ECB's Schnabel sets out case for central banks going on-chain

Isabel Schnabel, a member of the European Central Bank‘s Executive Board, used a speech at the Bank of England‘s Future of Money conference on 1 October 2026 to argue that tokenisation offers faster, safer, and smarter settlement through two core properties: atomicity, where all legs of a transaction settle simultaneously or not at all, and programmability, where settlement conditions are executed automatically by code. She framed these properties as reasons for central banks to consider moving onto distributed ledger infrastructure rather than remaining solely within legacy systems.

Schnabel situated the argument within the ECB’s commitment to preserving the anchor role of central bank money in a digitalised financial system. She distinguished between settlement assets, which include wholesale central bank digital currency (CBDC), tokenised deposits, and stablecoins, and trading or investment assets such as tokenised bonds and equities, stressing that the two-tier monetary structure can be replicated on-chain if central bank money is made available in tokenised form.

The speech highlighted three architectural options for bringing central bank reserves onto distributed ledger technology (DLT) platforms: direct issuance of natively tokenised reserves, a bridging or synchronisation approach connecting existing real-time gross settlement (RTGS) systems to DLT via interoperability layers, and a model using a private intermediary to issue settlement tokens fully backed by central bank reserves. Schnabel pointed to the Eurosystem’s Pontes project, launched on 21 September 2026, as a live example of the bridging approach, offering a dual settlement model via TARGET2 or DLT, with planned enhancements including round-the-clock availability and decentralised programmability. A separate initiative, project Appia, is exploring a broader range of tokenised architectures including a single unified ledger and interconnected networks.

For operators active in European tokenised securities markets, the practical signal is that the Eurosystem is moving from experimentation toward architectural commitment. The choice between Pontes-style bridging and fuller on-chain issuance remains open, but the window for passive observation is narrowing as live infrastructure begins to accumulate real transaction history.