European Central Bank President Christine Lagarde has detailed a sweeping strategy to establish a unified, pan-European tokenized financial market built on central bank money. Speaking at the ECB’s “Money In Transition” conference, Lagarde warned that without a trusted settlement asset, the growing tokenized sector risks severe fragmentation and instability, while Europe’s dependence on foreign payment networks threatens its financial sovereignty.
The centerpiece of the plan involves two major initiatives: Project Pontes, which will handle tokenized transaction settlement using central bank money, and Project Appia, a comprehensive blueprint for a continent-wide tokenized market. Lagarde revealed that consultations with over 60 industry stakeholders confirmed that large-scale digital asset issuance will not happen without risk-free, central bank-backed settlement. “Nothing else is trusted and accepted by all, and nothing else can expand and contract with the market’s needs,” she said.
A key target of Lagarde’s criticism was existing stablecoin models, particularly those pegged one-to-one with the euro. She argued their rigid supply mechanisms prevent them from providing crucial liquidity during systemic crises, potentially amplifying rather than mitigating financial stress. This marks a direct challenge to private stablecoins and underscores the ECB’s push for a public alternative.
The speech also highlighted Europe’s vulnerability in payment infrastructure. With international schemes handling over 60% of European card payments and 13 of 21 euro area countries lacking national card schemes, Lagarde stressed that “ownership of financial infrastructure is an instrument of power.” The proposed digital euro, as legal tender, would be universally accepted and aim to break this dependence, while the ECB is also linking its TIPS system with India’s UPI and Southeast Asia’s Nexus network to enable instant cross-border transfers “on rails of their own.”
Lagarde cautioned that without a common legal and technical framework, Europe risks recreating digital fragmentation, as national regimes already multiply. The ECB’s roadmap signals a decisive move to integrate tokenized bonds, real estate, and other assets into the mainstream, with the success contingent on coordination between regulators and the private sector.
