European Central Bank Executive Board member Isabel Schnabel used her August 28 speech at the Jackson Hole Economic Policy Symposium to argue that central banks should issue programmable reserves on-chain. “To reap the full benefits, central banks need to go on-chain too,” Schnabel said, framing the proposal as a wholesale-market reform rather than a consumer-facing digital euro project. Consumers would receive no ECB blockchain wallets, and the plan creates no cryptocurrency that investors can buy.
The core mismatch she identified is that tokenized financial assets can live on distributed ledgers while the money used to buy them still moves through conventional settlement rails. Schnabel wants central-bank reserves available directly in the same programmable environment as tokenized bonds, securities and collateral, enabling atomic settlement: the asset changes ownership exactly when payment arrives, and the whole transaction cancels if either side fails.
The ECB’s first operational response is Project Pontes, scheduled to launch in September 2026. It will connect market-operated distributed ledgers with the Eurosystem’s TARGET services, allowing tokenized asset transactions to settle in central-bank money without bespoke private settlement assets. In the first phase, legal settlement finality for cash payments remains in TARGET2, while smart-contract functionality and continuous 24/7 operations will come later.
Schnabel still sees a supporting wholesale role for regulated stablecoins, but stressed they cannot independently create central-bank reserves during funding shortages. She also warned that large stablecoin balances could draw deposits away from European banks, potentially limiting mortgage and business lending.
For the longer term, Project Appia is studying Europe’s permanent settlement architecture and is expected to deliver a blueprint by 2028. Options include a unified European ledger for reserves, commercial-bank money and assets; a Eurosystem ledger connected to private platforms; or interoperable ledgers. The ECB has not chosen whether to use public or permissionless infrastructure, and no live facility offers all the functions described.
