European Central Bank: Three Major Conditions Can Drive EU Tokenization Market Explosion

Gate News Report, March 24 — Piero Cipollone, a member of the European Central Bank Executive Board, stated that to achieve rapid development of the EU tokenization market, three key conditions must be met. First, developing a digital euro (CBDC) to provide a reliable public settlement anchor that supports stable and secure tokenized transactions. Cipollone pointed out that stablecoins pegged to the euro alone cannot replace fiat currency; without a trust foundation, market size will be limited.

The second measure is establishing effective cooperation with businesses within the EU to ensure that the services, liquidity, and business models needed for the tokenized financial market come from the market itself. Cipollone emphasized that the underlying infrastructure must be designed closely around market needs, rather than relying solely on regulation.

The third measure involves coordinating company law and securities regulations across member states to address legal obstacles faced by distributed ledger technology in cross-border environments. With 27 member states having different insolvency systems and securities laws, the lack of unified rules could create uncertainties in cross-border trading and settlement of tokenized assets.

Cipollone said the EU is advancing the “Pontes” initiative to develop a blockchain for the euro area, connecting distributed ledger technology with the existing TARGET transaction settlement system, with a pilot version planned for release in the third quarter of this year. Additionally, he warned that rapid expansion of stablecoins pegged to the dollar could weaken European monetary sovereignty, which is also a key reason for accelerating the development of the EU CBDC.

Analysts believe that once these three conditions are met, the EU tokenization market could experience rapid growth, further driving financial market innovation and cross-border capital integration, while providing businesses and investors with a more efficient and secure digital financial environment.