Tokenised assets set to transform European capital markets
Europe is preparing for a new era in finance as tokenised assets drive innovation, efficiency, and integration across capital markets.
Piero Cipollone, Member of the Executive Board of the ECB, at an event on ‘Building Europe’s integrated digital asset ecosystem: from vision to implementation,’ highlighted Europe’s progress in tokenised financial markets.
Since 2021, European issuers have placed nearly €4 billion in DLT-based fixed-income instruments, including the first digital sovereign debt by EU Member States. Eurosystem trials in 2024 processed €1.6 billion in transactions, showing strong demand for central bank money settlement in digital markets.
Tokenisation enables the full lifecycle of transactions on distributed ledgers, often automated through smart contracts.
Fragmentation across DLT platforms and the absence of a widely accepted on-chain settlement asset are holding back market expansion. Private assets, including stablecoins, carry volatility and credit risks, making a central bank money anchor crucial.
The Pontes platform, launching in Q3 2026, is expected to provide secure settlement across DLT platforms and TARGET services, supporting features like smart contracts and 24/7 operation.
The Appia roadmap outlines a longer-term vision for an integrated European tokenised ecosystem by 2028, covering technical standards, interoperability, collateral management, and cross-border connectivity.
Collaboration between the public and private sectors is critical. Feedback from 64 industry participants shaped Pontes, while Appia engages stakeholders to establish standards and ensure interoperability.
Harmonised legal frameworks are equally important to reduce post-trade fragmentation and support seamless asset transfers across EU Member States. Without coordinated laws, tokenised markets risk inefficiency despite advanced technology.
Europe is building momentum but faces intense global competition. Secure settlement, stakeholder collaboration, and legal harmonisation could make the EU a leader in digital finance with a single tokenised market.
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