ECB plans to buy tokenized bonds with its own funds
The European Central Bank rolled out a new system to link its payment system to blockchain-based financial markets.
The European Central Bank (ECB) plans to invest a small portion of its reserves in tokenized securities, giving the central bank direct exposure to blockchain-based financial markets.
The purchase would be settled through Pontes, the new Eurosystem platform, which allows wholesale transactions to settle in central bank money. The platform essentially bridges the ECB’s payment system to blockchain-based financial markets. The plan to invest in tokenized securities and Pontes reflects a more significant bid by central banks in the EU to adapt to the increasing use of blockchain in finance.
The ECB intends to test the technology as an investor, from buying tokenized bonds to settlement and portfolio management.
The ECB’s initial investments would focus on euro-denominated securities issued by euro-area governments, regional authorities, agencies and European supranational institutions.