Isabel Schnabel's presentation, given at the Bank of England on 1 October 2026, argues that central banks should bring their money onto distributed ledger platforms so that tokenised finance stays anchored in safe, trusted central bank money. Tokenisation promises faster, safer and smarter settlement through atomicity (all legs of a transaction settle together or not at all) and programmability (rules that execute automatically), and it could help integrate Europe's fragmented securities infrastructure. But modern monetary systems rely on a two-tier structure, with commercial bank deposits backed 1:1 by wholesale central bank money. Central banks can also expand liquidity elastically in times of stress, as the 1907 Panic and the COVID-19 period show. The ECB therefore aims to preserve the anchor role of central bank money in a digitalised world, alongside tokenised deposits and stablecoins as private settlement assets.
The presentation sets out three ways central banks could go on-chain: issuing natively tokenised reserves, bridging an existing RTGS system to a DLT platform, or letting a private intermediary issue tokens fully backed by reserves held off-chain. The Eurosystem's Pontes project, launched on 21 September 2026, takes the bridging route. It offers dual settlement via TARGET2 or DLT, with 24/7 availability and decentralised programmability planned as enhancements. The longer-term Appia project is exploring a single unified ledger, interconnected networks, or multiple shared ledgers. The conclusion is that if central bank money is available on-chain, a tokenised system can replicate the current two-tier structure and keep its safety, trust and scalability.
Click here to download Isabel Schnabel's presentation.
