The ECB on Monday launched an interbank tokenized payment system, Pontes,
allowing banks to settle transactions recorded on private distributed ledgers
using central bank money, the Financial Times reports. Tokenization creates
digital versions of assets and money that can be exchanged on blockchain-like
systems; Pontes is operated by the ECB. The ECB intends central bank money to be
an alternative to privately issued stablecoins for settling tokenized
transactions, and a retail digital euro for consumer and merchant payments is
also under development. ECB economists warned that widespread use of
USD-denominated stablecoins for settlement in Europe could erode the euro area's
monetary policy control.
