Eurosystem: DLT-based assets to be accepted as central bank collateral

On January 27, 2026, the European Central Bank (ECB) announced that the Eurosystem will accept marketable assets issued in central securities depositaries (CSDs) using distributed ledger technology (DLT) as eligible collateral for Eurosystem credit operations, effective March 30, 2026.

Background

Eurosystem credit operations are monetary policy tools used by the ECB and the national central banks of eurozone member states to manage liquidity in the banking system and steer short-term interest rates toward the ECB's policy objectives. Such operations provide eligible counterparties (in particular credit institutions) with access to central bank funding on a collateralized basis using specific eligible collateral.

Eligibility requirements

In its announcement, the ECB sets out the requirements for DLT-based assets to qualify as eligible collateral. In this respect, the ECB underlines that DLT-based securities, like other marketable assets, must comply with the existing Eurosystem collateral eligibility criteria and collateral management requirements.

These criteria include availability for settlement in eligible securities settlement systems, which must be compliant with the CSD Regulation (Regulation EU No. 909/2014) and reachable via TARGET2-Securities (T2S).

Implications

The announcement of the ECB is a milestone in the digital development of the EU's capital market with respect to the issuance and use of DLT-based, i.e., tokenized, securities. While EU credit institutions and issuers previously only experimented with issuances of tokenized bonds on a low level, eligible Eurosystem counterparties will now be able to leave the mere experimental stage and mobilize eligible tokenized securities for refinancing purposes in the Eurosystem. It is believed that the now fixed lack of collateral eligibility for tokenized securities was a main reason why tokenized bond issuances were less attractive compared to traditional bond issuances.

Following the ECB's announcement, issuances of DLT-based securities will become a more interesting alternative to traditional securities. Therefore, issuers must ensure Eurosystem collateral eligibility of their tokenized securities. This will enhance attractiveness and liquidity of these instruments. European CSDs have already developed full CSD Regulation-compliant DLT issuance platforms and gathered experience in the issuance of DLT-based bonds on such platforms. 

Legal teams should keep an eye on coming guidance from the Eurosystem involving the collateral management of DLT-based assets and monitor the developments of the regulatory frameworks for the issuance of tokenized securities, in particular with respect to the proposed changes to the CSD Regulation and the DLT Pilot Regime (Regulation (EU) 2022/858) in the European Commission's Market Integration Package (MIP) that has been published on December 4, 2025.

Outlook

The announcement of the ECB falls in line with recent developments that aim for the integration of DLT infrastructures in the European financial market, in particular, the proposals that are included in the MIP but also the ECB's dual-track strategy for a wholesale digital euro. Here, the short-term goal of the ECB is to establish a Eurosystem DLT platform on which the settlement of transactions that are conducted in market DLT platforms can take place in central bank money (project Pontes). 

The Eurosystem has also launched a work plan to explore if, how, and under what criteria DLT-based assets that are not represented in eligible securities settlement systems could become eligible and mobilized as collateral in the future. In this regard, a staggered approach is applied, i.e., in the future subsets of DLT-based assets may gradually become eligible and be mobilized taking into account market and legal developments.

Issuers and Eurosystem counterparties should therefore now, at the least, familiarise themselves thoroughly with the issuance of DLT-based securities in order to keep pace with developments in the market.