With European Central Bank President Christine Lagarde due to leave office on February 7, 2027, the Eurosystem has yet to decide how to build the infrastructure for Europe’s tokenised financial markets. Appia consultation results published on October 29 highlighted a central trade-off: concentrating settlement could reduce fragmentation but increase reliance on a single platform, while multiple networks could support competition only if money and collateral can move reliably between them.
Appia is the Eurosystem’s initiative to develop a wholesale tokenised finance ecosystem, covering assets issued or recorded using distributed ledger technology (DLT). Its latest report summarises 127 submissions but does not endorse a particular infrastructure model. The Eurosystem plans to publish a broader blueprint in 2028, setting out its findings, recommendations and principles.
Single networks promise efficiency but risk dependence
Settlement infrastructure determines how buyers pay for assets and how transactions are completed. One of Appia’s central questions is where central bank money should be available in a market made up of multiple DLT platforms.
Respondents said a single network could pool liquidity, standardise processes and simplify coordination, reducing fragmentation and duplicated investment. But concentrating activity and control could also make that infrastructure systemically important, increase dependence on a particular technology or provider, and weaken incentives to innovate. Pooling liquidity alone would not integrate the market if participants were locked into the platform holding their settlement funds.
Multiple networks could accommodate different business models and reduce dependence on one infrastructure provider. For banks, however, competition between platforms could still fragment liquidity if funds and collateral cannot be transferred efficiently. Without enforceable interoperability standards, money, collateral, identity systems and compliance processes could each become isolated across networks, the report said.
Another model supported by a number of respondents would allow a limited group of eligible networks to settle in central bank money under transparent access criteria and common rules. This aims to balance network choice with consistent requirements, but its feasibility remains under review. The Eurosystem must determine how it could provide central bank money across several networks while retaining control over that money. The report does not grant access rights to any network operator.
Access rules will shape competition
Consultation respondents identified access criteria as central to whether competition can work. They called for objective, non-discriminatory standards and a clear distinction between shared network infrastructure and commercial services built on top of it. Customer-facing activities such as issuance, trading, custody and wallets were generally seen as better suited to competition among market participants than to provision through shared infrastructure.
The distinction matters because DLT operators may provide infrastructure alone, sell user services as well, or do both. If an operator competes directly with businesses that depend on its network, questions may arise over the infrastructure’s neutrality. The responses summarised in the report place emphasis on central bank control of money, network neutrality and open access—not simply on who owns the infrastructure. Whether a network is operated by the Eurosystem or by the market, governance arrangements would need to prevent discriminatory access and preserve public-sector control over central bank money.
A position paper submitted in April by the International Capital Market Association (ICMA) favoured multiple interoperable networks and coordinated standards rather than a single Eurosystem-operated network. It cited competition, concentration risk and market-led innovation. The submission represented some members of ICMA’s DLT Bonds Working Group and predated the October consultation results.
Banks need funds and collateral to move across platforms
For banks, a practical test is whether settlement balances and collateral can be used effectively across different trading venues. A single network could concentrate those resources. A system of competing networks would need reliable cross-platform transfers to ensure that usable funds or assets are not trapped in separate pools. The report’s focus on the central bank’s role in liquidity management and collateral mobilisation shows that interoperability is an operational issue as well as a matter of technical compatibility.
Issuers of euro stablecoins also face questions about the role of private settlement assets. Respondents said tokenised deposits and euro-denominated stablecoins could complement central bank money in a two-tier system. That does not make the different payment instruments equivalent to central bank money.
Existing collateral policy does not mean that all on-chain assets are eligible. On October 29, ECB Executive Board member Piero Cipollone said the Eurosystem had, since March 30, accepted eligible marketable assets issued through central securities depositories using DLT. The Eurosystem is still assessing whether assets outside existing eligible settlement systems can qualify and what standards would apply.
Pontes is live; Appia blueprint due in 2028
Some infrastructure is already operating. Pontes launched its initial core services on September 21 and is gradually onboarding participants. The system connects market DLT platforms with the Eurosystem’s TARGET services, enabling wholesale tokenised asset transactions to settle in central bank money.
Cipollone outlined further milestones on October 29. Pontes is expected to extend its operating hours significantly by mid-2027 and move to continuous, year-round operation in 2028. Instant settlement finality on Eurosystem DLT platforms is planned for as early as 2027. Appia’s 2028 milestone is different: it is intended to deliver a blueprint for the wider ecosystem. Cipollone also said the existing securities settlement platform, T2S, will operate alongside the new tokenised infrastructure.
Lagarde’s successor will inherit this timetable but will not have sole authority to determine the architecture. Under Article 283 of the Treaty on the Functioning of the European Union, the European Council appoints the ECB president by qualified majority, acting on a Council recommendation and after consulting the European Parliament and the ECB Governing Council. The announcement of Lagarde’s departure did not name a successor.
The Governing Council remains the ECB’s main decision-making body, comprising the Executive Board and the national central bank governors of euro area countries. The next steps will depend on design work and market participation. The consultation report proposes more complex, cross-sector testing in 2027 and further engagement with stakeholders on tokenised deposits and payments, securities, and governance of shared networks; participation arrangements have yet to be announced. For banks, issuers and DLT operators, the eventual access rules will determine whether shared settlement infrastructure can support competition while keeping the funds and collateral firms need available.