Isabel Schnabel, a member of the Executive Board of the European Central Bank (ECB), argued that central bank reserves be integrated directly into tokenized financial infrastructures. In a speech at the Jackson Hole symposium, on Friday (28), she said that stablecoins can complement the financial system, but not replace central bank money as the final settlement asset.
The ECB is already preparing this transition. The Projeto Pontes is set to begin in September, connecting platforms based on distributed ledger technology (DLT) to the Eurosystem's traditional settlement systems.
Stablecoins remain below reserves
For Schnabel, stablecoins have a fundamental limitation: private issuers cannot quickly create liquidity in times of financial stress.
Central banks, on the other hand, can expand the supply of reserves when demand for money increases. Therefore, the ECB considers that reserves remain the safest asset for settling transactions between financial institutions.
The director acknowledged that regulated stablecoins can expand payment options, but classified them as complementary to public money.
The argument gains importance as securities, deposits and other assets begin to migrate to programmable networks. For the ECB, the money used to settle these transactions also needs to keep up with this transformation.
Pontes begins in September
In the initial stage, Projeto Pontes will allow transactions carried out on DLT platforms to be settled through the existing TARGET Services of the Eurosystem.
The plan is to later advance to an infrastructure in which the settlement can occur directly on a DLT platform operated by the Eurosystem itself, with support for smart contracts and, in the future, operation 24 hours a day.
The ECB has already tested this model. Between May and November 2024, there were more than 50 tests and experiments with 64 participants involving settlement of wholesale transactions with central bank money.
Since March 30, 2026, certain assets issued via DLT can also be accepted as collateral in Eurosystem credit operations.
Appia aims for European infrastructure by 2028
Projeto Appia has a broader scope. The ECB intends to present by 2028 a proposal for an architecture to connect central bank money, bank deposits and tokenized financial assets.
Among the options studied are a single infrastructure, a network administered by the Eurosystem linked to private platforms, or different networks capable of interoperating.
The central bank also sees the initiative as a matter of financial autonomy. In its documents, the Eurosystem states that it wants to reduce future dependence on foreign infrastructures, technologies and legal frameworks.
Schnabel's message is that, if the European financial market advances to tokenized networks, central bank money must advance alongside — maintaining its central role in the settlement of transactions.
