The European Central Bank (ECB) is preparing to invest a "small portion" of its own funds in tokenized public-sector securities, with the purchases to be settled in central bank money through Pontes, the Eurosystem's new settlement system for distributed ledger technology (DLT)-based transactions that launched on Monday.

In a separate announcement published on Monday, the ECB said the initiative will give the institution firsthand experience across the full investment lifecycle, including trade execution, settlement, systems and portfolio management. The central bank aims to gain firsthand DLT market experience by buying tokenized public-sector securities and settling the trades through the new system.

The planned purchases will be made from a non-monetary-policy portfolio that generates income to help cover the ECB's operating expenses. Initial investments will focus on euro-denominated securities issued by euro-area central and regional governments, public agencies and European supranational institutions. The ECB's Executive Board will determine the timing and operational details once the preparatory work has been completed.

The European Stability Mechanism (ESM) said in a Monday statement that Pontes would connect emerging DLT platforms with established central bank infrastructure, helping preserve central bank money's role as the settlement asset as financial markets become increasingly tokenized. That distinction carries weight: settling tokenized trades in central bank money rather than commercial bank money is regarded by policymakers as a way to preserve the singleness of money and contain settlement risk as trading activity migrates to DLT platforms.

Pontes forms part of the Eurosystem's broader work on how transactions in tokenized assets can be settled in central bank money. The ECB's Governing Council agreed in July 2025 to build the system after exploratory trials in late 2024, in which market participants tested settling DLT-based transactions in central bank money through Eurosystem services. Work is also under way on a longer-term interoperability solution, known as Appia, designed to link DLT platforms with established market infrastructure in the longer term.

The Eurosystem has been examining the interaction between DLT platforms and established market infrastructure as the tokenization of financial assets accelerates across Europe. In the European Union, that development has been supported by the DLT Pilot Regime, in force since March 2023, which allows DLT-based financial instruments to be issued and traded on specially authorised pilot market infrastructures.