The European Central Bank said tokenization could improve EU capital markets, but only with central bank money, interoperable infrastructure and resilient regulation.
The European Central Bank (ECB) set out a cautious path toward tokenizing Europe’s capital markets, saying the technology can deliver efficiency gains only if it remains anchored to central bank money, infrastructures remain interoperable, and regulation is “robust and supportive.”
In its latest Macroprudential Bulletin published on Monday, the ECB said distributed ledger technology (DLT) could help deepen the European Union’s savings and investments union, but warned that benefits will depend on interoperable infrastructure and policymakers keeping pace with new risks.
The central bank’s stance highlights a push to modernize market plumbing in the bloc without loosening control over settlement or financial stability.
