Money in the digital age: digital euro, tokenisation and the role of central banks - European Central Bank

The European Central Bank has outlined its perspective on how money may evolve in the digital age, grouping three connected themes: a digital euro, tokenisation, and the role of central banks. The digital euro refers to the ECB's work on a possible central bank digital currency for retail use, while tokenisation involves representing traditional assets — such as bonds or deposits — as digital tokens that can be transferred and settled on programmable platforms.

The common thread is settlement. If more assets move onto tokenised infrastructures, the question becomes what form of money settles those transactions. The ECB's framing suggests central bank money could remain the anchor, with a digital euro potentially complementing, rather than replacing, cash and commercial bank deposits.

For markets, the relevance lies in infrastructure rather than price. Watch for further ECB publications, pilot results, and any legislative progress on the digital euro, alongside how banks and market participants adapt to tokenised settlement. These are long-horizon developments, and timelines remain subject to design and regulatory decisions.