ECB Pontes Settlement System Goes Live With Ripple’s XRPL-Based Platform Axiology
Dr. Guneet Kaur
4 min read
Key Takeaways
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The European Central Bank launched Pontes on Sept. 21, allowing tokenized securities transactions to settle in central bank money through the Eurosystem.
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Axiology is one of only four DLT operators connected at launch, alongside Cashlink, Clearstream and SWIAT.
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Axiology uses a private, permissioned system built from the open-source XRP Ledger code, but Pontes does not use public XRP for settlement.
The European Central Bank has switched on on Pontes, bringing tokenized securities closer to Europe’s core financial infrastructure, with technology derived from the XRP Ledger (XRPL) sitting inside one of the four platforms connected at launch.
Pontes allows transactions recorded on private distributed ledgers to settle using central bank money through the Eurosystem’s TARGET Services. The ECB said the system went live Monday with 13 market participants, including Deutsche Bank, Santander, Socit Gnrale, and the European Investment Bank.
Axiology, Cashlink, Clearstream, and SWIAT are the first four DLT operators.
For XRP followers, Axiology is an interesting name on that list.
How Axiology Connects XRP Ledger Tech to Pontes
Axiology is a Lithuanian financial market infrastructure company that issues, trades, settles, and holds tokenized securities.
More importantly, its connection to XRP Ledger technology isn’t speculative.
An ECB report covering its earlier DLT experiments explicitly describes the Axiology DLT Trading and Settlement System as “a private, permissioned infrastructure built using the open-source code of the XRP Ledger.”
Think of the setup as three separate layers.
A tokenized bond or other security can exist and trade on Axiology’s private ledger. Axiology then connects to Pontes, which links participating DLT platforms with the Eurosystem. The cash side of the transaction can then settle in central bank euros through TARGET Services.
Axiology itself says it is one of four DLT operators registered for Pontes’ initial launch.
The company is not running the public XRP Ledger. Its system uses XRPL’s open-source technology as its foundation while operating independently with permissioned participants such as regulated banks and brokers.
The ECB says Axiology can combine accounting, trading, and settlement within a single infrastructure and support instant delivery-versus-payment, in which the asset and payment are exchanged simultaneously.
Pontes Brings Central Bank Money Onchain
Pontes tackles a problem facing Europe’s growing tokenized asset market: a security may exist on a blockchain, but institutions still need a trusted way to settle the cash side.
