The European Central Bank has launched a new service called Pontes that links its payment infrastructure with blockchain-based financial markets, Reuters reported on September 21.
Pontes allows banks and investors to settle blockchain-based transactions using euros backed by the ECB rather than private forms of digital money such as stablecoins. Deutsche Bank, Santander and Clearstream were among the first institutions to complete onboarding.
The service will initially operate on business days between 8 a.m. and 4 p.m. Central European Time, with the ECB planning to expand it over time. The central bank said blockchain technology could make transactions more efficient by combining parts of an asset's lifecycle and increasing automation.
The ECB also said it will invest a very small share of its €23 billion in own funds in highly rated, euro-denominated blockchain-based securities issued by public institutions.
The initiative is separate from the ECB's retail digital-euro project. It is focused on wholesale market settlement and institutional financial infrastructure rather than replacing cash or consumer bank accounts.