ECB's Isabel Schnabel Advocates for Blockchain Monetary Policy

European Central Bank Executive Board member Isabel Schnabel called for the integration of central-bank money onto blockchain technology to modernize the execution of monetary policy. Speaking at the Federal Reserve’s Jackson Hole symposium, Schnabel argued that the programmability of distributed ledgers would improve liquidity provision, collateral management, and overall financial stability.

Schnabel stated that "smart contracts could make monetary-policy implementation more flexible by allowing central banks to create new operational facilities and adjust parameters such as interest rates, collateral requirements and access conditions with immediate effect." She further suggested that tokenization could help resolve the fragmentation of financial infrastructures across Europe.

To implement this tokenized system, the European Central Bank is pursuing two primary tracks. The Pontes project serves as a short-term solution to link distributed-ledger platforms with existing Target services, while the long-term Appia initiative aims to provide a comprehensive blueprint by 2028.