Piero Cipollone, an official at the European Central Bank, said Europe must build an integrated ecosystem for tokenised financial assets to avoid deepening the fragmentation of its capital markets. Speaking at a symposium, Cipollone noted that the continent currently operates 31 central securities depositories, 14 central counterparties and 323 trading venues, with more than 95 percent of securities transactions in 2023 settled within individual depositories rather than across borders.
Cipollone said tokenisation — the representation of assets as programmable data files on distributed ledger technology — offered the prospect of simplifying finance by combining functions such as issuance, trading, clearing and settlement into a shared digital environment. Smart contracts could automate processes ranging from coupon payments to compliance checks, and transactions could be settled atomically, meaning cash and asset transfers occur together or not at all, he said.
The ECB official warned that the same technology could support either an integrated market or fragmented closed platforms. Globally, tokenised traditional assets recorded on public blockchains increased roughly fivefold between March 2025 and March 2026, Cipollone said, citing one private American platform that processed an average of USD 354 billion in tokenised repo transactions per day in March 2026, four times the volume a year earlier. In Europe, institutions are developing tokenised bonds, deposits and settlement solutions, and central securities depositories have announced major initiatives to tokenise securities.
Cipollone identified three risks to Europe's digital finance transformation: fragmentation of assets and liquidity across incompatible networks, loss of a monetary anchor if tokenised markets become reliant on private settlement assets, and external dependence on non-European infrastructures and technologies. Central bank money must be at the core of any integrated European ecosystem for digital assets, he said.
The ECB has already begun accepting marketable assets issued via distributed ledger technology at European central securities depositories as eligible collateral as of March, Cipollone noted. He said the market is at a critical juncture, sufficiently advanced for opportunities to be tangible but still young enough for Europe to shape its architecture and overcome coordination challenges.
