In an effort to modernize the eurozone’s financial infrastructure, the European Central Bank (ECB) announced a blockchain settlement pilot. This dual-track initiative is to settle blockchain-based transactions using the central bank’s money. Once put in place, the move will reshape how securities and payments are handled in the EU.

The pilot project is expected to begin in Q3 of 2026.

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The ECB Reveals Blockchain Settlement Pilot Program

The pilot is based on a short-term strategy called “Pontes.” As part of this strategy, the ECB’s existing TARGET Services will be linked with the distributed ledger technology (DLT) platforms. TARGET Services are the Eurosystem’s key infrastructure for payment and securities settlement. Pontes will allow blockchain-based financial transactions to be settled directly in central bank money, boosting efficiency while maintaining security.

“This decision is in line with the Eurosystem’s commitment to supporting innovation without compromising safety and efficiency in financial market infrastructures,” the ECB said in a statement.

The ECB’s 2024 exploratory trials, which had 64 institutions and more than 50 blockchain tests, will be used to help with the next pilot for Pontes. During those trials, more than €1.6 billion worth of tokenized assets were paid in central bank money. This shows that there is a strong demand for blockchain-based settlement systems in the market.

The second part of the plan, called “Appia,” represents a longer-term vision. Rather than offering a bridge between legacy and blockchain systems, Appia aims to build a fully integrated DLT ecosystem for wholesale central bank settlements. The ECB says Appia will position Europe for safe and efficient operations at a global level while continuing to evaluate DLT’s potential in partnership with public and private stakeholders.

In order to ensure industry collaboration, the ECB will form two contact groups. There will be a group for Appia and one for Pontes. It has announced a call for expressions of interest for the Pontes group in the coming weeks.

The ECB’s decision shows that more and more people throughout the world are interested in using blockchain technology to improve the architecture of financial markets. The Bank of England and the BIS Innovation Hub in London worked together to test DLT for large-scale interbank payments in 2023. The experiment showed that DLT could connect different financial platforms to cut the cost of real-time gross settlement systems and speed up settlement timeframes.

The ECB’s own assessment of its DLT testing shows that the technology might help make Europe’s financial markets less fragmented and more efficient. It also talks about how important it is for tokenized settlements to work with one another, follow the law, and be standardized in order to get the most out of them. The ECB’s dual-track approach shows that it is moving in a new direction towards digital innovation that combines experimentation with the strict rules of central banking. As 2026 gets closer, everyone will be watching Pontes and Appia to see if blockchain can really make European finance faster, safer, and more unified.