European Central Bank (ECB) Executive Board member Isabel Schnabel stated on August 28, 2026, that the ECB must put central bank money onto blockchain networks, calling for central banks to move on-chain as financial markets increasingly adopt tokenized assets and digital settlement systems.
ECB Sees Blockchain as Key to Its Future Role
Speaking at the Jackson Hole Economic Policy Symposium, Schnabel said central banks should embrace distributed ledger technology and bring central bank money into tokenized financial markets.
Her argument is focused on maintaining the position of central bank money as the main foundation for financial settlement. As private digital payment instruments and stablecoins become more widely used, the ECB sees a need to ensure that central bank money remains available within emerging financial infrastructure.
Schnabel said moving central bank reserves onto programmable platforms could also help central banks respond more quickly when financial markets face stress.
Why Central Bank Money Matters
Tokenization allows financial assets and money to be represented as digital tokens on programmable platforms. According to Schnabel, this development could bring significant benefits to European financial markets, including faster settlement and better integration across countries.
However, she argued that tokenized markets need a safe and reliable settlement asset. Central bank money has a unique role because central banks can provide liquidity when financial markets come under pressure.
Schnabel warned that relying mainly on private alternatives could weaken the central role of central bank money. Stablecoins may provide useful payment options, but they do not have the same position as direct central bank claims.
Faster Payments and Better Liquidity Management
One of the biggest advantages of blockchain-based settlement is programmability. Schnabel said smart contracts could automate processes that currently require multiple messages, checks, and manual reconciliation.
For example, collateral requirements could be adjusted automatically, while repo transactions could be completed more efficiently. This could reduce delays and make it easier for financial institutions to manage liquidity.
The change could become especially important during periods of market stress. Faster transactions may also increase the speed at which liquidity needs move through the financial system, making it important for central banks to have tools that can respond just as quickly.
ECB is already working on blockchain projects.
The European Central Bank is already exploring ways to connect its financial infrastructure with distributed ledger platforms.
Its Pontes project is designed to connect distributed ledger platforms with existing payment infrastructure. Meanwhile, Appia focuses on the longer-term architecture, standards, and legal framework needed for tokenized financial markets in Europe.
Schnabel also discussed different ways central bank reserves could operate on shared or connected ledgers. A single European ledger could reduce fragmentation, while multiple interoperable ledgers could offer greater flexibility and resilience.
A New Direction for European Finance
The push toward blockchain-based settlement reflects a wider change in financial markets. As securities and other assets become increasingly tokenized, the infrastructure supporting payments and settlement may also need to evolve.
For the ECB, the challenge is not simply adopting a new technology. It is ensuring that central bank money continues to anchor the financial system as markets change.
ECB’s Blockchain Vision Could Shape the Future of Finance
Isabel Schnabel’s August 28 remarks place blockchain and tokenized finance firmly within the ECB’s future planning. By bringing central bank money onto programmable networks, the ECB could strengthen its role in financial settlement while improving liquidity management and monetary policy operations.
With projects such as Pontes and Appia already underway, Europe is moving toward a more connected and tokenized financial system. The next step could determine how central bank money fits into that new market structure.
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