The European Central Bank is accelerating efforts to build an integrated tokenised financial market, with central bank money at its core, to prevent fragmentation that could weaken the euro’s global standing.
Speaking at the Deutsche Bundesbank’s Symposium on payments innovation in Frankfurt on Wednesday, ECB Executive Board member Piero Cipollone said Europe must act decisively to shape the architecture of tokenised finance before incompatible platforms entrench existing fragmentation. Tokenisation and distributed ledger technology (DLT) can streamline issuance, trading, clearing and settlement by consolidating functions into programmable digital environments, he said, but warned that the same technology could either foster competition or deepen dependencies.
Europe’s capital markets remain highly fragmented despite incremental progress. The bloc hosts 31 central securities depositories, 14 central counterparties and 323 trading venues, with over 95% of transactions in 2023 settled within individual CSDs. Cross-border activity remains limited, even within groups operating multiple CSDs. Tokenisation could reduce reliance on legacy silos by enabling atomic, conditional settlements and smart-contract automation across the value chain, Cipollone said.
Global momentum in tokenised assets is accelerating. Between March 2025 and March 2026, tokenised traditional assets recorded on public blockchains rose roughly fivefold worldwide. In the U.S., one private platform processed an average of $354 billion in tokenised repo transactions daily in March 2026, four times the volume a year earlier. European institutions have begun issuing tokenised bonds, deposits and collateral, while CSDs have launched large-scale tokenisation initiatives. In March, the Eurosystem began accepting DLT-issued marketable assets as eligible collateral at European CSDs.
Despite these developments, tokenised real-world assets remain a fraction of global markets, with limited liquidity and secondary trading. Cipollone identified three risks: fragmentation into incompatible networks, loss of monetary anchor without central bank money, and external dependence on non-European infrastructure or governance.
The ECB’s objectives include providing DLT settlement in central bank money to anchor tokenised finance, fostering an integrated European payments and securities ecosystem, and preserving the euro’s global attractiveness and Europe’s strategic autonomy. Progress includes 64 market participants in over 50 trials in 2024, confirming that access to central bank money is critical for safe, scalable tokenised markets.
The EU is also advancing regulatory measures, with co-legislators discussing an extension of the DLT Pilot Regime and the European Commission reviewing potential refinements to the Markets in Crypto-Assets Regulation based on early implementation experience.
