Tokenization · Decrypt
Europe’s Central Bank Gears up to Invest Own Funds in Tokenized Securities
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The European Central Bank has begun preparing to invest a small portion of its own funds in tokenized securities, with the transactions settling through its newly launched Pontes service.
Key facts
- In June, New York Life Investment Management introduced a tokenized bond fund
- Tokenised financial markets continue to evolve, alongside the development of new DLT-based market infrastructures,” the European Central Bank said in a statement
- The investments will come from the ECB’s own-funds portfolio, a non-monetary-policy portfolio that generates income to help cover operating expenses unrelated to its supervisory duties
- The ECB has not disclosed the exact amount it plans to invest or when purchases will begin
Summary
The ECB is preparing to invest a small portion of its own funds in tokenized securities. In an announcement on Monday, the ECB said the purchases would help it “gain practical experience as an investor and build institutional expertise in the use of distributed ledger technology (DLT) in financial markets.” “Tokenised financial markets continue to evolve, alongside the development of new DLT-based market infrastructures,” the European Central Bank said in a statement. Initial purchases will focus on tokenized, euro-denominated securities issued by euro-area governments, public agencies, and European supranational institutions.