ECB sets out three models for central bank money on-chain in Isabel Schnabel's Bank of England presentation
Updated: 4 days ago
Isabel Schnabel, a member of the European Central Bank's Executive Board, presented three models for putting central bank money on a distributed ledger at the Bank of England's Future of Money conference in London on 1 October 2026. The ECB central bank money on-chain presentation, titled "Central banks on-chain", also set out how the ECB's Pontes and Appia projects relate to those models.
Central bank money, in this context, is the reserves that commercial banks hold at a central bank and use to settle payments between themselves. A distributed ledger, or DLT, is a shared database kept in step across many computers.
The three models Isabel Schnabel presented
The slides describe three ways to bring reserves onto a programmable platform. In the first, reserves are natively tokenised, meaning they exist directly as digital tokens on the platform. In the second, an interoperability layer connects the existing real-time gross settlement system, the central bank's main payment system, to a DLT platform through a hash link, and reserves stay untokenised. In the third, settlement tokens fully backed by central bank reserves are issued as private claims rather than claims on the central bank, and the reserves themselves stay off-chain.
The slides credit tokenisation with two properties. Programmability means settlement can be made conditional on rules that run automatically. Atomicity means the legs of a transaction settle together or not at all.
The slides do not rank the models or set a date for choosing between them. The common thread is the ECB's stated aim to preserve the anchor role of central bank money in a digitalised world. They show a tokenised system keeping today's two-tier structure, in which central bank money is the core settlement asset and commercial banks continue to provide money and financial services to customers, provided central bank money exists on-chain.
How Pontes brings ECB central bank money on-chain
Pontes launched on 21 September 2026. According to the slides, it combines a bridge solution with Eurosystem DLT to offer tokenised central bank money for settling DLT-based transactions, with a dual settlement route through either the existing payment system or DLT. The planned enhancements are 24/7 availability and decentralised programmability, and the slides say it can settle tokenised securities, tokenised deposits and stablecoins.
Pontes bridges the existing system and DLT platforms, so it resembles the second model. The slides do not map the projects to the models explicitly, and that comparison is this article's reading.
Appia is the longer-term project. It examines four configurations: a single unified ledger, interconnected networks, multiple shared ledgers, and a single shared DLT linking Eurosystem DLT with market DLTs. The slides give no dates for Appia. Schnabel had signalled the direction earlier: Reuters reported on 28 August 2026 that she said central banks "need to go on-chain too" to reap the full benefits.
What the Bank of England Future of Money conference means for the UK
The Bank of England hosted the conference, organised jointly with the Financial Markets Group at the London School of Economics, to mark Charles Goodhart's 90th birthday. Schnabel spoke on the closing panel, chaired by Ricardo Reis, alongside Tobias Adrian of the International Monetary Fund and Neha Narula of MIT.
The presentation makes no statement on sterling or on the Bank of England's own plans, so no Bank of England position should be inferred from the venue.
For UK firms the practical point is that the euro area now has a live central bank money rail for tokenised settlement, and its designers are publicly comparing three ways to extend it. Whether and how sterling follows is a question the presentation leaves to the Bank of England.
Key takeaways
Isabel Schnabel presented three models for putting central bank money on DLT at the Bank of England's Future of Money conference in London on 1 October 2026.
The models are natively tokenised reserves, an interoperability layer linking the existing payment system to DLT, and fully backed settlement tokens issued as private claims.
Pontes launched on 21 September 2026, while Appia is examining four longer-term ledger configurations, and the slides give no dates for it.
The ECB says its aim is to preserve the anchor role of central bank money, and the presentation makes no statement on sterling or Bank of England policy.
Frequently asked questions
What are the ECB's three models for putting central bank money on-chain?
Isabel Schnabel's slides describe natively tokenised reserves, an interoperability layer linking the existing real-time gross settlement system to a DLT platform while reserves stay untokenised, and fully backed settlement tokens issued as private claims with the reserves kept off-chain.
Has the ECB chosen a model for central bank money on DLT?
No. The presentation given on 1 October 2026 does not rank the three models or set a date for choosing between them. The stated aim is to preserve the anchor role of central bank money in a digitalised world.
What is the ECB's Pontes project?
Pontes launched on 21 September 2026 and combines a bridge solution with Eurosystem DLT to offer tokenised central bank money for settling DLT-based transactions. According to the slides, it can settle tokenised securities, tokenised deposits and stablecoins, with 24/7 availability and decentralised programmability planned.
What is the ECB's Appia project?
Appia is the ECB's longer-term project. It examines four configurations: a single unified ledger, interconnected networks, multiple shared ledgers, and a single shared DLT linking Eurosystem DLT with market DLTs. The slides give no dates for it.
Did the ECB presentation say anything about Bank of England or sterling plans?
No. Although it was given at the Bank of England's Future of Money conference in London, the presentation makes no statement on sterling or on the Bank of England's own plans.
Disclaimer
This article is provided for general information only and does not constitute legal, financial, or investment advice. The regulatory treatment of tokenised assets and digital securities varies by jurisdiction and continues to evolve. Readers should seek independent professional advice before making any financial, legal, or regulatory decisions.
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