ECB to Extend TARGET Hours Enabling Pontes, 24/7 DLT Settlement

Why It Matters

Extending TARGET hours reduces friction for 24/7 digital euro transactions and helps bridge the gap between legacy RTGS and emerging DLT platforms, accelerating the adoption of tokenised central‑bank money across Europe.

Key Takeaways

• ECB will extend TARGET operating hours, not RTGS, soon
• Pontes launches Sep 2026 with limited hours, 24/7 by 2028
• Extended hours aim to ease TIPS liquidity pressures
• BIS’s Project Agora underscores global 24/7 DLT payment need
• Out‑of‑hours DLT liquidity may fragment pools, reducing interest income

Pulse Analysis

The European Central Bank used its annual consultation to announce an extension of operating hours for the TARGET settlement platform, while leaving the real‑time gross settlement (RTGS) system unchanged for now. The move directly addresses liquidity bottlenecks that have surfaced in the instant payment system TIPS, where banks often need cash outside traditional banking hours. By keeping TARGET open longer, the ECB hopes to provide a bridge for wholesale DLT solutions such as Pontes, allowing participants to settle tokenised central‑bank money without waiting for the RTGS window.

Pontes, the ECB‑backed wholesale DLT platform, is slated for a limited‑hour pilot in September 2026, with a full‑time, 24‑seven rollout expected by 2028. The phased approach mirrors the digital euro’s own development path, where cash must be available on‑chain to support continuous payments. Keeping funds on the DLT layer reduces reliance on overnight transfers but also risks fragmenting liquidity across multiple pools, potentially eroding banks’ interest‑earning balances. The extended TARGET hours therefore act as a safety net, ensuring that participants can top‑up DLT wallets when the RTGS system is closed.

The broader industry is watching, as the Bank for International Settlements unveiled Project Agorá—a cross‑border DLT prototype linking seven central banks across five time zones. BIS officials stressed that true 24/7 real‑time payments require cash to sit on the distributed ledger, not merely in a closed‑hour RTGS account. If central banks cannot guarantee continuous liquidity, banks may hoard excess funds on private DLT networks, creating fragmented pools and pressuring net interest margins. ECB’s incremental hour extension signals a pragmatic step toward harmonising legacy infrastructure with emerging tokenised money, a prerequisite for a fully operational digital euro.