ECB to invest in tokenized securities via new Pontes DLT

The European Central Bank plans to put a small amount of its own funds into tokenized publicsector securities, using a new settlement system called Pontes. According to the ECB, the trades will be settled in central bank money and are meant to give the bank practical experience with tokenized markets. The initiative will cover the full investment process, including execution, settlement, systems, and portfolio management. The initial purchases are expected to focus on eurodenominated securities issued by euroarea governments, public agencies, and European supranational institutions. The ECB said its Executive Board will decide on the timing and operational setup after preparation is completed.