Axiology joins Europe’s push to bring central bank money to digital capital markets

Axiology, a digital infrastructure provider for European capital markets, has joined four other market infrastructures in a new European initiative to bring central bank money to digital capital markets. Called Pontes, the service enables transactions in emerging digital capital markets to be settled in central bank money, bridging platforms that use distributed ledger technology (DLT) to trade digital securities with TARGET Services, the existing infrastructure used to settle euro payments.

Martynas Pilkis, Business Development Officer at Axiology, explained that the cash leg matters because when trading financial instruments on DLT-native infrastructure, a settlement asset is required. While Axiology already supports settlement in euro-denominated stablecoins, Pontes offers an alternative: settling the cash leg in central bank money.

Pilkis highlighted that stablecoins, despite their benefits, have limitations for high-value transactions due to credit and liquidity risks. Central bank money remains relevant as new financial infrastructure develops, and leaving it behind could introduce credit and liquidity risks. Small technology companies like Axiology offer speed and agility, which regulators and institutions value.