Building foundations for innovative and resilient capital markets

10 November 2026 Press Release

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Tokenisation is system-wide evolution and requires strong foundations
Done well, it can support further integration of European capital markets
Europe needs to strengthen foundations for resilient non-bank finance

Central Bank of Ireland Deputy Governor Vasileios Madouros today told the European Capital Markets Institute's annual conference that Europe's shift to tokenised finance and the continued expansion of non-banks are two defining shifts in finance. Both call for building strong foundations to support integration, resilience, innovation and trust in capital markets.

Deputy Governor Madouros said tokenisation is moving beyond experimentation towards live applications, though it remains limited in scale. It could deliver faster settlement, reduced counterparty exposure and the provision of new services. It could also help address the persistent and costly fragmentation of European capital markets. "Technology alone will not deliver these benefits," he said. "That requires an integrated evolution of the legal, regulatory, operational and monetary arrangements that underpin a trusted and resilient financial system."

Deputy Governor Madouros highlighted four areas for action:

Monetary foundations: Settlement in central bank money is key to safe scaling. Eurosystem solutions such as Pontes and Appia are advancing this.
Legal and regulatory clarity: The guiding principle should be "same activity, same risk, same regulatory outcome". Regulators must stay agile and avoid premature prescription that could embed assumptions while the architecture is still evolving.
Interoperable tokenised deposits: This an area where the private sector needs to lead. The focus must be on "interoperability by design" at a pan-European level.
Public sector issuance: European sovereign and supranational issuers can act as a catalyst by issuing tokenised bonds that settle on Pontes. This would provide high-quality collateral and encourage private sector issuance.

Building on the feedback statement published last week, the Deputy Governor also highlighted that the Central Bank will launch a series of focused, time-bound sprints with industry on specific dimensions of tokenised finance. The Central Bank will also launch a Tokenisation Access Point, providing a clearer route for market participants to engage with us on the evolving landscape, including on questions around the application of existing rules and frameworks. "These mechanisms will allow us both to anticipate emerging policy questions and respond in a flexible and agile manner," he said.

On non-banks, the Deputy Governor said their systemic footprint is likely to grow as Europe strengthens capital market financing "A greater diversification in the sources of financing of the European economy would have several macro-financial benefits. But, for those benefits to be realised and sustained, this source of financial intermediation needs to be robust enough to withstand adverse shocks”, he said.

He set out three priorities, beginning with surveillance and a focus on the resilience of core markets. " We have already developed our frameworks for assessing whether the banking sector would have the ability to maintain the provision of credit in times of stress. We should now increasingly develop our frameworks for assessing whether markets could maintain the provision of financing when shocks hit," he said.

Second, he called for the regulatory framework for non-bank finance to evolve, starting with implementation of already-agreed international reforms. "There are areas where internationally-agreed reforms have not yet been implemented in Europe fully," he said, citing FSB recommendations on open-ended funds and non-bank leverage.

Finally, he highlighted potential advancements to the crisis management toolkit , including in relation to powers to deal with the failure of non-bank payment providers and exploring the trade-offs associated with providing liquidity to non-banks.

Read full speech here.