The European Central Bank on Wednesday unveiled the timetable for the eurozone initiative to shape the development of a token wholesale financial ecosystem based on the single currency and ensure the continued relevance of the euro as an international currency.
The strategy includes Pontes, a layer of distributed ledger technology (DLT) for transactions that debuted in the third quarter, and Appia, which “will focus on collaborating with the market to develop a fully innovative and integrated financial market ecosystem encompassing tokenization and DLT,” the bank said in a post on its website.
Appia is at the heart of the strategy and is expected to continue until 2028, when the Eurosystem – the monetary authority comprising the ECB and the central banks of countries using the euro – plans to publish a plan outlining its vision of a tokenized financial ecosystem. It is designed to explore the long-term architecture of a tokenized financial system, including infrastructure, governance and standards.
“The initiative aims to foster a more integrated, competitive and innovative European payments and securities environment, strengthening Europe’s strategic autonomy and resilience and ensuring the continued relevance of the euro as an international currency,” the statement said.
European policymakers increasingly view financial infrastructure as a geopolitical problem, warning that reliance on non-EU payment networks and dollar-centric financial systems exposes the bloc to external pressures. An analysis carried out last year for the European Parliament found that Europe’s reliance on foreign payment networks represented a “structural vulnerability” to its financial sovereignty and could become a source of geopolitical leverage.
The project is also part of the Eurosystem’s wider framework of adapting financial infrastructure to the rise of distributed ledger technology, or blockchains, which allows financial assets such as bonds, funds and securities to be represented as digital tokens on shared networks.
“Appia aims to chart a path from today’s financial system to tomorrow’s token markets, firmly anchored in central bank money,” ECB board member Piero Cipollone said in a statement.
