From Pontes to Appia, but not to an Agorá: strategic hedging and infrastructural geoeconomics in the ECB's wCBDC initiative

Abstract

Abstract

The promotion of US dollar-denominated stablecoins under the Trump administration, together with the intensification of financial sanctions, has heightened the strategic dependencies embedded in existing wholesale financial infrastructures. Against this backdrop, the European Central Bank (ECB) has launched a dual-track wholesale central bank digital currency (wCBDC) initiative: Pontes, a near-term bridge between existing Eurosystem infrastructure and distributed ledger technology (DLT), and Appia, a longer-term, fully DLT-native architecture. Existing CBDC research has largely treated wCBDC design as a technical modernisation or focused on retail CBDCs and alternatives developed by rival powers. It has not yet explained why an advanced economy deeply embedded in the liberal financial order would develop two parallel infrastructures simultaneously. This article addresses that gap by bringing together infrastructural geoeconomics and strategic hedging theory. It develops a framework based on three observable mechanisms – risk recognition, functional redundancy, and international cooperation – and applies it to Pontes and Appia through qualitative analysis of ECB documents, technical reports, and eight semi-structured elite interviews conducted in 2025. The article argues that the ECB’s dual-track initiative is a form of strategic hedging: it builds redundancy to reduce European exposure to US-centric settlement infrastructure and dollar-denominated stablecoins while preserving the transatlantic relationship.