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ECB outlines next steps for Europe’s tokenised financial market
ECB says fragmentation remains a challenge, noting that in 2023 more than 95% of transactions by both volume and value were settled within the same individual CSD.
At an ECB Symposium, Piero Cipollone discussed how Europe is moving from the vision of tokenised finance toward delivery, describing tokenisation and distributed ledger technology as a way to represent and transfer assets as programmable tokens.
The ECB executive warned that the shift to tokenised markets also carries a risk of renewed fragmentation if incompatible platforms proliferate, potentially undermining efforts to integrate Europe’s capital markets.
He said progress must address remaining cross-border settlement limits, pointing to how Europe still relies heavily on local infrastructure, with securities held and settled within individual CSDs.
Cipollone highlighted current concentration in settlement, saying that in 2023 more than 95% of transactions by volume and by value were settled between parties in the same individual central securities depository.