Lithuania's Axiology is one of four companies that can connect tokenised securities to the ECB's new settlement service Pontes. The other three are German or German-owned: Clearstream, SWIAT and Cashlink.
Caption: Marius Jurgilas is chief executive of Axiology. Photo: Axiology
"Tokenisation will only deliver real change in European capital markets if digital securities can connect to the infrastructure institutions already rely on," says Marius Jurgilas, chief executive of Axiology, in a press release.
The Eurosystem opens Pontes on 21 September, a service that lets tokenised securities settle in central bank money. To use it, a trade has to go through an operator registered with the Eurosystem.
Four operators are on the list. Three of them are German or German-owned: the Deutsche Börse company Clearstream, SWIAT and Cashlink. The fourth is Axiology, based in Vilnius.
Read more about how Pontes links central bank money to tokenised securities.
Axiology is supervised by the Bank of Lithuania. It holds a licence as a trading and settlement system under the EU's DLT pilot regime, a time-limited arrangement that lets approved firms trade and settle securities on blockchains.
Axiology has taken part in the market contact group for Pontes. It has now also been selected for the ECB's new contact group for Appia, the Eurosystem's long-term track towards a more integrated digital capital market.
Under Pontes, the securities remain recorded and traded on Axiology's platform. What changes is that the payment can be made in central bank money.
The company is testing the full life cycle of a bond, from issuance and trading to interest payments and redemption.
"Pontes is an important step in making that connection possible today," says Jurgilas.
Axiology is still working through the testing and certification process. The company notes that final certification and the necessary approvals have to be in place before it can take part in live operation.
Sources: Axiology, The Paypers, Blockstories
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