ECB’s Isabel Schnabel Calls for Central-Bank Money to Move Onchain

European Central Bank Executive Board member Isabel Schnabel has called for central banks to explore moving central-bank money onto blockchain infrastructure, arguing that distributed ledger technology could help modernize monetary-policy implementation, collateral management and liquidity provision.

According to information shared on X by @WuBlockchain, citing Bloomberg, Schnabel said central banks should make greater use of the programmability offered by distributed ledgers. Her comments highlight the ECB’s ongoing work to examine how blockchain-based infrastructure could interact with the existing financial system.

The initiative comes as central banks and financial institutions assess how distributed ledger technology (DLT) can be incorporated into established payment and settlement infrastructure without disrupting existing systems.

ECB Develops Pontes and Appia Initiatives

The ECB plans to launch its Pontes initiative next month, with the project designed to connect DLT platforms with existing TARGET services.

TARGET is the Eurosystem’s infrastructure for processing payments and supporting settlement across the financial system. By connecting DLT-based platforms with established TARGET services, the ECB aims to examine how transactions involving tokenized assets and blockchain-based systems could interact with central-bank infrastructure.

Schnabel’s comments indicate that the ECB is not limiting its exploration to a single technological model. Instead, the central bank is assessing different approaches for integrating distributed ledgers into the monetary and financial infrastructure.

The ECB is also developing a longer-term initiative known as Appia. A blueprint for the Appia initiative is expected in 2028, providing a longer-term framework for the central bank’s exploration of DLT-based financial infrastructure.

Programmability Could Change Financial Infrastructure

A central feature of distributed ledger technology is programmability, which allows certain financial transactions and processes to be automated through digital rules and applications.

Schnabel said this capability could have applications beyond payments. Central banks could potentially use programmable infrastructure to improve aspects of monetary-policy implementation, manage collateral more efficiently and facilitate liquidity provision.

The concept is particularly relevant to the growing development of tokenized financial assets, in which traditional assets are represented digitally on blockchain or other distributed ledger networks.

For central banks, the ability to provide central-bank money directly within infrastructure supporting tokenized assets could become an important consideration as financial markets adopt new settlement technologies.

However, integrating new systems with existing financial infrastructure presents technical and institutional challenges. Central banks must consider how different ledgers communicate with one another and how new arrangements can maintain reliable settlement and liquidity functions.

ECB Evaluates Different Ledger Models

Schnabel said the ECB is still examining different models for its DLT strategy. One option under consideration is a unified ledger, in which different types of financial assets and forms of money could operate on a shared infrastructure.

Another approach would involve connecting multiple ledgers so that separate blockchain-based systems can interact while retaining their individual structures.

The ECB has not yet selected a definitive model, according to Schnabel’s comments. The assessment reflects the complexity of developing infrastructure capable of supporting emerging forms of tokenized finance while remaining connected to established central-bank systems.

The planned Pontes launch next month represents an earlier stage of this work, while the Appia blueprint expected in 2028 points toward the ECB’s longer-term approach.

The developments underscore the central bank’s continued examination of distributed ledger technology and its potential role in the future financial system. For the ECB, the focus extends beyond cryptocurrencies to the underlying infrastructure that could support payments, settlement, collateral and liquidity in increasingly tokenized markets.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.