Piero Cipollone, a member of the European Central Bank‘s Executive Board, has stated that tokenized deposits and stablecoins require tokenized central bank money as a public settlement anchor for Europe’s tokenized financial markets to grow. He made the remarks during a speech at the House of the Euro in Brussels on Monday. The comments highlight growing concern within the ECB about the infrastructure needed to support digital asset markets across the continent.
Cipollone pointed to Pontes, the Eurosystem’s distributed ledger technology settlement initiative, as a key part of the solution. The initiative is designed to connect market DLT platforms with the Eurosystem’s TARGET Services, enabling settlement in central bank money. The ECB has indicated that Pontes is scheduled for an initial launch in the third quarter of 2026.
Cipollone explained the risks of proceeding without such infrastructure in place. He noted that without tokenized central bank money, a seller of a tokenized security could receive payment in an asset exposed to price volatility or credit risk, which would constrain the market’s capacity to scale. This concern underpins the ECB’s push for a reliable and stable settlement layer for digital transactions.
The remarks build on the ECB’s broader Appia initiative, published on March 11, which aims to produce a blueprint for a future European tokenized financial ecosystem by 2028. One component of Appia functions as an interoperability standard for assets, ensuring tokenized assets can be transferred across different DLT platforms through compatible data formats and smart contract standards. Cipollone called on market infrastructure operators, banks, custodians, and technology providers to explore the Appia roadmap and submit feedback to encourage greater public-private collaboration.
Beyond settlement infrastructure, Cipollone said Europe also requires a legal framework that keeps pace with technological developments. He described the European Commission‘s proposal to extend the DLT Pilot Regime as an important development, while cautioning that the absence of a comprehensive tokenization framework risks building advanced settlement infrastructure on a fragmented set of regulations. He warned this could leave the bloc unable to fully benefit from the technology.
Cipollone indicated that Europe may ultimately need a dedicated legal framework to support the seamless issuance and transfer of tokenized assets across member states. The call for regulatory clarity reflects broader concerns that existing rules may not be sufficient to accommodate the scale and complexity of a fully tokenized financial system. A cohesive framework, he suggested, would be necessary to avoid regulatory gaps undermining the infrastructure being developed.
The ECB executive’s comments come shortly after stablecoin issuer Circle submitted feedback to the European Commission’s Market Integration Package on March 20. Circle urged lawmakers to expand the existing DLT Pilot Regime and provide e-money token cash account services to authorized crypto-asset service providers. The overlapping calls from both public and private sector actors point to mounting pressure on European regulators to deliver a more unified approach to digital asset oversight.
Originally reported by CoinTelegraph.
