Piero Cipollone, a member of the European Central Bank's Executive Board, delivered a speech on April 15, 2026, making the case that tokenisation represents a qualitatively different kind of financial technology from everything that preceded it, and that its benefits will not materialise without deliberate public coordination. The speech is Cipollone's second major address on tokenisation this year, following a March 23 presentation titled "Building the Rails for Europe's Tokenised Financial Markets," focused on European market infrastructure.

The Core Argument

Cipollone opened with a striking historical data point. Despite over a century of financial innovation, the unit cost of financial intermediation in major Western economies has remained at roughly 2% of intermediated assets since the late 1800s. Electronic messaging and trading platforms, he argued, were incremental improvements rather than structural ones. Tokenisation is different because it collapses the full transaction lifecycle, including issuance, trading, settlement, and custody, into a single digital environment operating around the clock. Smart contracts (self-executing code that automates agreement terms) eliminate the manual reconciliation that is a major driver of that persistent 2% cost, though realising the full reduction requires complementary changes across the financial system.

Two structural problems prevent the market from capturing those gains on its own. First, individual firms face real upfront migration costs but uncertain returns unless others adopt the same standards simultaneously. Second, established intermediaries who profit from existing inefficiencies have no commercial incentive to remove them. Cipollone cited the late-19th century conflict between Edison's direct current and Westinghouse's alternating current electricity systems (the "War of Currents") as a precedent: the technical deadlock was resolved not by market forces but by regulatory standardisation.

"These gains are conditional on complementary components adopting technology simultaneously," Cipollone said, explaining why the coordination problem cannot be left to individual actors.

What the ECB Is Actually Building

The speech confirmed two concrete programmes. Pontes, targeting a Q3 2026 launch, is a bridge service connecting private DLT (distributed ledger technology) platforms to the Eurosystem's existing TARGET payment infrastructure. It will allow 24/7 settlement in central bank money and support smart contracts. This follows the ECB's 2024 exploratory trials, in which 64 participants across nine jurisdictions settled approximately €1.6 billion in actual central bank money across 50-plus experiments.

Appia is the longer-term architecture, with a blueprint due in the second half of 2028. It covers six building blocks: technical standards, interoperability, collateral management, cross-border connectivity, legal foundations, and governance. The ECB opened a public consultation on Appia in March 2026. Separately, the Eurosystem began accepting DLT-based assets as eligible collateral for its credit operations that same month, making that the first live integration of tokenised assets into standard central bank operations.

The central concern running through both programmes is fragmentation. Europe already has dozens of incompatible DLT platforms that have collectively issued around €4 billion in tokenised fixed-income instruments since 2021, but with no common settlement layer. Without shared standards and non-discriminatory access, Cipollone warned, tokenisation will produce "walled gardens" that fragment liquidity and entrench new monopolies rather than dismantling old ones.

Market Context and Scale

The European tokenised asset market reached approximately €38 billion as of February 2026, according to the ECB's April 2026 Macroprudential Bulletin. That figure looks large in isolation but represents a fraction of the €241 trillion traditional financial market it sits alongside. Globally, on-chain tokenised real-world assets (financial instruments represented as tokens on a blockchain) reached roughly $24 billion by mid-2025, a roughly fivefold increase over three years, according to CoinDesk. The two figures are not directly comparable: the ECB's €38 billion applies a broader European-specific methodology, while the $24 billion reflects a narrower measure counting only on-chain real-world assets, so the European figure cannot be read as a subset of the global one. Private credit accounts for about 61% of that on-chain global total, according to CoinLaw (April 2025). Industry forecasts project the broader tokenisation market reaching $18.74 trillion by 2031 at a compound annual growth rate of 44.25%, according to Fortune Business Insights, though those longer-range figures carry significant uncertainty.

Why This Matters Outside Europe

The ECB's analytical framework aligns closely with guidance from the Bank for International Settlements, whose 2025 Annual Economic Report argued that functional tokenised markets require what the BIS calls the "tokenisation trilogy": tokenised central bank reserves, tokenised commercial bank deposits, and tokenised government bonds operating together. The BIS also found that existing stablecoins (privately issued digital tokens pegged to a currency) fail three named monetary soundness tests, singleness, elasticity, and integrity, and noted that over 99% of stablecoin value is denominated in US dollars. For central banks in South Asia, West Africa, and Southern Africa, that concentration represents a live sovereignty risk. Tokenised finance integration that defaults to dollar-denominated instruments can gradually displace local monetary policy transmission, a dynamic the BIS research characterises as "stealth dollarisation" and identifies as one of the deepest policy lessons from the ECB's approach for non-European central banks.

India's Reserve Bank is among the most advanced in applying this logic. Its wholesale CBDC programme and a proposed Unified Markets Interface for tokenised real-world assets map closely onto the architecture Cipollone describes. In October 2025, the RBI ran a deposit tokenisation pilot in which supervised banks issued tokenised deposits settled in wholesale CBDC, a direct implementation of the BIS tokenisation trilogy and concrete evidence of the framework moving from concept to practice.

South Africa's central bank has engaged with the Appia consultation as an observer and is tracking the ECB's technical standards for cross-border applications. That engagement builds on the South African Reserve Bank's participation in BIS Projects mBridge and Dunbar, and its 2025 digital payments roadmap, which names retail CBDC, stablecoins, and tokenisation as two-year priorities. One concrete private-sector application of Appia's interoperability building block is already taking shape: the Ubuntu Tribe and Global Settlement Holdings gold tokenisation initiative, announced in December 2025 with a target exceeding $5 billion in tokenised gold assets, is explicitly designed as an Africa-to-Europe bridge and will depend on the kind of cross-border settlement standards that Appia aims to establish.

Nigeria, by contrast, faces the fragmentation problem in acute form: its eNaira CBDC (13 million wallets) and the newer cNGN stablecoin operate largely in parallel with mobile money platforms, with minimal interoperability across any of them.

The regional picture extends further east and across the continent. In South Asia, Pakistan, Bangladesh, and Sri Lanka all face correspondent banking costs of 5 to 8% on remittance corridors, a structural inefficiency that the BIS's Project Agorá, which targets tokenised cross-border payments coordinated between central banks, is designed to address. For these economies, the architecture being built in Frankfurt carries direct practical relevance even though none of them are Eurosystem members.

Africa's position in this landscape involves a structural twist that Cipollone's framework does not address directly. Africa accounts for approximately 70% of the world's $1 trillion mobile money market, and intra-African trade represents only about 25% of total continental trade despite the $3.4 trillion AfCFTA market remaining dependent on correspondent banking for cross-border transactions. In this context, the "established intermediaries" who would resist displacement by tokenisation are not banks in the European sense but mobile money operators, a distinct set of incumbents with different incentive structures and different political economies. That distinction matters for how the coordination logic Cipollone articulates would need to be adapted by African regulators drawing on the Appia framework.

What Comes Next

The Pontes launch in Q3 2026 will be the first real test of whether the ECB can deliver a working wholesale tokenised settlement layer on schedule. The Appia consultation period will shape the technical standards that, through BIS channels, are likely to influence central bank frameworks well beyond Europe. For financial institutions in markets with European counterparties, particularly those working on cross-border delivery-versus-payment settlement, the Appia standards document is the one to watch. The consultation is open to non-Eurosystem central banks as observers; South Africa has already engaged in that capacity, and the window represents a concrete opportunity for other emerging-market central banks to shape technical standards before they harden into defaults.