Less than a month ago, Isabel Schnabel stood at the Bank of England and repeated the argument she made at Jackson Hole in August: central banks must go on-chain. Not as a theoretical proposition, but as operational policy. The ECB has now acted on that conviction. Pontes went live on 21 September 2026, connecting DLT-based market platforms to the Eurosystem's TARGET Services and enabling wholesale tokenised transactions to settle in central bank money.
This is not an experiment. The Eurosystem's own announcement describes Pontes as "the first initiative under the Eurosystem's strategic programme to make central bank money fit for a tokenised future."[1] Deutsche Bank, Santander, Société Générale, and the European Investment Bank joined the initial phase, alongside four DLT operators including Clearstream.[2] The system supports smart contract automation and integrates issuance, trading, settlement, and custody on a single set of rails.
The logic behind the move was laid out clearly in Schnabel's Jackson Hole speech. She framed the question bluntly: can stablecoins take over as the settlement asset for tokenised finance, or does central bank money remain essential? Her answer was unambiguous. Stablecoins lack "the independent capacity to expand liquidity rapidly during periods of financial stress."[3] In a crisis, a stablecoin issuer cannot create more of the asset it has promised to honour. A central bank can. That asymmetry makes central bank money structurally superior as a settlement anchor, and it makes central banks unwilling to cede the settlement layer to private tokens.
The ECB is not alone in this assessment. The Bank of England has committed to launching its own synchronisation service by 2028, enabling DLT platforms to settle atomically in sterling central bank money.[4] Sarah Breeden, the Bank's Deputy Governor for Financial Stability, described the existing RTGS system as a "parked Ferrari" for tokenisation, capable of settling tokenised transactions in central bank money, but waiting for the infrastructure to mature around it.[5] Eighteen firms are now testing use cases in the Bank's Synchronisation Lab, including settlement of tokenised securities and FX.
The direction is clear. Two of the world's most significant central banks are building settlement infrastructure that assumes tokenised finance will operate on distributed ledgers, and that institutional counterparties will expect to settle against risk-free public money rather than private instruments. The question for VASPs planning OTC desk launches is not whether this matters, but how quickly it will affect the counterparties they want to serve.
OTC desks in the digital asset space have historically operated on fragmented infrastructure, custody with one provider, liquidity from another, settlement through bilateral arrangements that depend on banking partners or stablecoin rails. That architecture worked when the market consisted primarily of crypto-native firms trading against each other. It becomes a liability when the counterparty is a European bank that settles its tokenised bond trades through Pontes, or a UK asset manager whose custodian is participating in the Digital Securities Sandbox.
The pain point is not abstract. MiCA's transitional period expired on 1 July 2026, and OTC desks operating in the EU now require CASP authorisation with minimum capital of €125,000, documented AML/CFT programmes, and infrastructure that survives a banking-partner audit.[6] That compliance burden already forces infrastructure decisions. But compliance with MiCA does not guarantee compatibility with the settlement infrastructure that institutional clients are beginning to use. A desk that meets every regulatory requirement but cannot connect to Pontes or interface with the Bank of England's synchronisation service will find itself operationally locked out of the trades that matter most.
The architecture problem compounds over time. OTC desk builds typically take six to twelve months, absorbing capital and engineering bandwidth. Choosing a custody-liquidity-settlement stack that cannot accommodate on-chain settlement in central bank money means committing to infrastructure that will need to be rebuilt, or abandoned, when institutional counterparties move to the new rails. The rebuild cost is not just financial. It is the market window that closes while the desk is being re-architected.
Atomic settlement makes the stakes concrete. When both legs of a transaction, asset and cash, settle simultaneously or not at all, counterparty risk disappears. Capital that would otherwise sit locked between trade and settlement becomes available immediately.[7] For institutional counterparties, that efficiency is not optional. It is the baseline expectation. A desk that cannot offer atomic settlement against central bank money will compete at a structural disadvantage against those that can.
None of this requires VASPs to predict exactly how the infrastructure will evolve. The ECB has already signalled that Pontes will expand over time "in line with market needs and technological developments."[8] The Bank of England is explicit that its synchronisation service is designed to connect to external ledgers, including those built on DLT.[9] What matters now is selecting platform architecture that can absorb these connections without requiring a full rebuild.
The decisions are not between competing visions of the future. They are between infrastructure that assumes institutional settlement rails will change and infrastructure that assumes they will not. Schnabel's Jackson Hole speech acknowledged that "traditional and tokenised financial systems will likely operate side by side for a significant period, if not permanently."[10] But operating side by side is not the same as operating in isolation. The interoperability layer is where value will concentrate, and where desks that chose the wrong architecture will find themselves stranded.
For heads of trading infrastructure at regulated VASPs, the calculation is straightforward. The ECB has moved from policy papers to production systems. The Bank of England has committed to a live service within eighteen months. The institutional counterparties that VASPs want to serve are already participating in the pilots. Building an OTC desk today without planning for connectivity to these rails is building for a market that is already receding.
References
[2] ECB Pontes launch announcement, 21 September 2026
[4] Bank of England, "Innovation in wholesale markets,"
[5] Sarah Breeden, "Modernising money and markets," speech at City Week, May 2026
[6] MiCA Regulation (EU) 2023/1114, Article 67
[8] ECB Pontes launch announcement, 21 September 2026
[9] Bank of England, "Extending RTGS and CHAPS settlement hours," consultation paper, 2026
[10] Isabel Schnabel, "Central banks on-chain," Jackson Hole, 28 August 2026
