Clearstream is building a hybrid infrastructure designed to allow traditional and tokenised securities to coexist within the same environment (Photo: Shutterstock)

Clearstream is building a hybrid infrastructure designed to allow traditional and tokenised securities to coexist within the same environment (Photo: Shutterstock)

LuxCSD is preparing its first DLT-based bond issuance using Pontes, Clearstream told Paperjam. The Eurosystem initiative, launched on 21 September, is designed to bring central bank money onto distributed-ledger infrastructure.

Luxembourg is preparing to take another step in the institutionalisation of tokenised securities. LuxCSD, the country’s central securities depository, is expected to handle its first DLT-based bond issuance using Pontes, parent company Clearstream told Paperjam. The transaction would give the Luxembourg market a concrete role in the Eurosystem’s new infrastructure for settling distributed-ledger transactions in central bank money.

Pontes launched on 21 September 2026. Clearstream confirmed that it is working with the European Central Bank, Banque centrale du Luxembourg and Deutsche Bundesbank as it works in the new environment.

Clearstream had already announced in August that it would participate in the Eurosystem’s Pontes testing programme, carrying out end-to-end tests with market participants ahead of launch. Those tests cover connectivity, operational readiness, interoperability between market infrastructures and delivery-versus-payment settlement in central bank money.

Now, the Luxembourg dimension is becoming clearer. “LuxCSD will also see its first DLT-based issuance of a bond,” Clearstream told Paperjam, adding that the transaction would use Pontes.

The cash side of tokenisation

The importance of Pontes lies less in the creation of another blockchain than in solving one of the structural problems that has slowed institutional tokenisation: cash. Issuing a security on blockchain is only one side of a financial transaction. Institutional investors also need a safe and efficient means of paying for it. In conventional securities markets, a large share of wholesale settlement takes place in central bank money. If securities move onto distributed ledgers while the cash leg remains trapped in conventional infrastructure, some of the potential efficiency of tokenisation disappears.

Pontes is intended to bridge that gap. The Eurosystem initiative provides an interoperability solution connecting DLT platforms with TARGET services, allowing DLT transactions to settle using wholesale central bank money. “Bringing the securities as well as cash onto the blockchain is important,” Clearstream told Paperjam. Wholesale central bank money in digital form is “a crucial component” for enabling delivery-versus-payment transactions on DLT infrastructure. But Clearstream does not regard central bank money as the only answer.

CBDC, stablecoins and tokenised deposits

The future digital securities market is likely to rely on several forms of money. Clearstream expects wholesale central bank money to coexist with commercial-bank solutions such as tokenised deposits and stablecoins. Having access to wholesale central bank money is “a very, very big step forward”, Clearstream said, but only one of several pieces still required for tokenised capital markets to reach institutional scale. Connectivity is another.

Market participants need the ability to hold both the security and the corresponding digital cash. That means providing institutional wallet infrastructure without requiring every asset manager or bank to build its own blockchain architecture. A third requirement is asset mobility. For active banks, broker-dealers and investment banks, simply holding a tokenised security is insufficient. They must be able to mobilise it, pledge it as collateral, lend it and reuse it to cover exposures both on and off blockchain.

Clearstream sees this ability to reuse assets as one of the remaining building blocks required before tokenisation can operate at the same scale as conventional markets. The EIB transaction completed through Clearstream in June provided an early demonstration. The European institution issued €77.5 million of DLT-native commercial paper, which was subsequently mobilised by DekaBank and Eurex Clearing through Clearstream’s collateral infrastructure and the Eurosystem Collateral Management System.

Pontes is not another silo

Clearstream is also careful about how Pontes fits into its broader digital strategy. It does not see the Eurosystem solution as a standalone infrastructure to which clients should have to connect separately. “It’s just a building block,” Clearstream said. Creating separate infrastructures for each blockchain use case would force banks and asset managers to make new investments, develop new connectivity and adapt their internal processes each time. Instead, Clearstream wants Pontes to sit inside the hybrid digital infrastructure it is building across traditional and tokenised markets.

“What needs to be done is an integrated, call it hybrid, environment where the client doesn’t actually feel the difference,” Clearstream said. That philosophy mirrors Clearstream’s wider digital-first strategy announced in June. Its future infrastructure is designed to allow market participants to hold traditional securities, digital securities and different forms of cash within a single portfolio and eventually move assets between those environments.

A Luxembourg connection

Luxembourg already has some of the infrastructure required for the next stage. LuxCSD is connected to the Eurosystem’s settlement infrastructure and already provides issuance, central-bank-money settlement and asset servicing for securities including investment funds. It is owned by Clearstream. Its involvement with digital central-bank money is also not new.

As early as 2021, LuxCSD participated alongside BIL and SEBA Bank in an experiment led by Banque de France in which securities delivered through TARGET2-Securities were exchanged against simulated CBDC tokens. Pontes takes the market closer to an operational framework. Clearstream said the capabilities of its future hybrid infrastructure should ultimately be available across its CSD network, including LuxCSD.

The objective is to give Luxembourg market participants access to wholesale central bank money on blockchain without requiring them to leave the institutional infrastructure they already use. Clearstream also pointed to Luxembourg’s early development of a legal framework for blockchain-based securities and its ability to attract digital-asset companies as advantages for the financial centre. But the first DLT bond through LuxCSD will provide a more tangible test than regulatory positioning alone.

If Pontes can connect tokenised securities, central bank money and existing CSD infrastructure without creating another technological silo, the Luxembourg transaction could demonstrate what the next phase of tokenisation looks like: not another pilot blockchain, but digital assets beginning to move through the plumbing of Europe’s existing capital markets.