Piero Cipollone: Sparking the Transformation of Finance: Tokenisation and the Role of Central Banks

Why It Matters

If central banks provide a risk‑free tokenised settlement layer and clear standards, tokenisation can lower financing costs and broaden access for borrowers and savers across Europe.

Key Takeaways

• Tokenisation could cut finance intermediation costs below the historic 2% level
• ECB's Pontes will deliver tokenised euro settlement from September 2026
• Appia roadmap targets unified European tokenised‑finance standards by 2028
• Coordinated adoption across issuance, trading, clearing and legal layers is essential
• Central‑bank money as settlement anchor boosts liquidity for DLT‑based assets

Pulse Analysis

Tokenisation and distributed‑ledger technology are being framed as the next "electricity" of finance—a general‑purpose technology that can rewrite the entire value‑chain from issuance to settlement. Unlike past upgrades that merely accelerated existing processes, digital tokens enable a single, immutable ledger to host issuance, trading, clearing and custody in a 24/7 environment. This architectural shift promises to eliminate costly reconciliations, automate payments via smart contracts, and ultimately reduce the cost of moving capital between savers and borrowers.

The European Central Bank is moving from theory to practice with its Pontes initiative. After a series of 50 cross‑border pilots that settled roughly €1.6 billion on DLT platforms, the ECB will begin offering tokenised central‑bank money as a risk‑free settlement asset. By accepting DLT‑issued securities as collateral in its credit operations, the Eurosystem is also expanding the liquidity pool for tokenised assets. These steps address two critical friction points: the need for a trusted settlement anchor and the ability to mobilise tokenised collateral in monetary‑policy operations.

However, the technology’s impact hinges on coordinated standards and governance. The Appia roadmap, published in March, outlines a blueprint for a European tokenised finance ecosystem, evaluating whether a single shared ledger, interoperable networks, or a hybrid model best serves market integration. By setting technical standards, legal frameworks, and cross‑border connectivity rules, Appia aims to prevent a fragmented landscape of walled‑garden DLTs. Successful implementation could lower financing costs, increase market competition, and deliver broader economic benefits, fulfilling the promise of tokenisation as a true efficiency catalyst for the 21st‑century financial system.