Börsen-Zeitung, Aug. 31, 2026 mpi Frankfurt – ECB Director Isabel Schnabel is calling for a revolution in the eurozone’s monetary system. At the Fed’s Jackson Hole Symposium, she spoke in favor of tokenized central bank money. She argued that it is not enough to simply connect existing payment systems to distributed ledger technology (DLT) platforms. Instead, central banks should actively use the technology themselves and issue central bank reserves directly onto it.
Specifically, Schnabel’s vision is being explored in the Eurosystem’s long-term Appia project, which is currently examining various architectural models for a tokenized European financial system. Under discussion are a unified European ledger on which central bank money, commercial bank money, and financial assets would be represented together; a separate ECB ledger connected to private DLT networks; or a system of multiple interconnected ledgers. In her speech, Schnabel herself leaves open which of these options should prevail. She points to the trade-off between an infrastructure that is as unified as possible—maximizing atomicity and programmability—and the associated risks to governance, competition, and the system’s resilience. Atomicity means that the payment and delivery of an asset are executed only together or not at all. This eliminates the settlement risk that can arise in transactions today.
The ECB’s second project in this area, Pontes, is in the near term and already very concrete. It is scheduled to launch in September and will initially connect existing payment systems such as TARGET2 with private DLT platforms. However, Schnabel emphasizes that, despite its name, Pontes goes far beyond a mere bridge solution. In the long term, legal settlement finality is also set to migrate to the Eurosystem’s own DLT platform, supplemented by smart contracts and continuous, round-the-clock operation.
While Schnabel views the central bank as the operator even in the case of tokenized infrastructure, Pablo Hernandez de Cos took a different approach during his remarks at Jackson Hole. For the General Manager of the Bank for International Settlements (BIS), the focus is on tokenized deposits held by commercial banks. He identifies two key characteristics of a functioning monetary system. First, all forms of money must be convertible into central bank money at face value. Second, liquidity in the system must be able to expand elastically as needed. Both of these conditions are met with tokenized deposits, since settlements between banks can continue to be processed in the traditional manner via central bank accounts. De Cos considers the tokenization of reserves itself to be possible, but not mandatory. He sees open questions primarily regarding interoperability between banking platforms and competition between large and small institutions.
When it comes to stablecoins, de Cos and Schnabel agree that they are not a viable substitute for central bank money. Schnabel attributes this primarily to a lack of elasticity: Unlike central banks, private issuers cannot expand the liquidity of their coins at will when it matters most during times of stress.
De Cos raises another point: Stablecoins undermine the “uniformity” of money, since different coins are not guaranteed to be interchangeable at face value—for example, anyone wishing to exchange Tether for Circle would have to rely on the secondary market, where deviations from face value are not uncommon, especially during periods of stress. Added to this is an integrity issue: A large portion of stablecoin holdings is held in anonymous wallets without identity verification, which complicates money laundering controls. Both central bankers therefore see stablecoins as playing, at best, a supplementary role—for example, in decentralized credit markets—but not as an independent foundation of the monetary system.