Pythagore project, NEU CP-NEU MTN market modernization

Project launch

On 10 October 2025, Banque de France and Euroclear announced the launch of a joint project (“Pythagore”) aimed at tokenizing Negotiable European Commercial Paper (NEU CP), marking a significant step in the modernization of short-term markets through the use of distributed ledger technology (DLT).

The NEU CP market is the largest short-term debt market in euros within the European Union, with €310 billion of outstanding amounts. It offers issuers competitive funding conditions, market depth, and reduced documentation costs, and represents a particularly efficient way to direct short-term liquidity.

Project challenges

Pythagore is introducing tokenization at the heart of this market using distributed ledger technology (DLT). This technology allows securities to be represented as secure digital tokens, stored on a blockchain infrastructure. Characterized by a high concentration of players, simple financial products, short maturities and a high issuance frequency, the NEU CP market is particularly suited to the scale-up of this type of technology.

In line with the ambitious Eurosystem roadmap for innovation and integration in payment infrastructure, the Pythagore project will allow for the settlement of NEU CP tokenized in wholesale central bank digital currency, via interoperability between Euroclear’s new infrastructure and Pontes, the Eurosystem solution that will link DLT-based market platforms to TARGET services by the end of September 2026.

The desired benefits for the entire ecosystem are numerous: automation and acceleration of the various stages of the settlement cycle, extension of market accessibility schedules, enhanced transparency thanks to the native traceability of operations, increased security and reduction of operational risks. Modernization also seeks to increase the attractiveness of the NEU CP market at European and international level. By fostering operational efficiency, cost reduction and transparency, tokenization will serve the saving and investment union.

The Pythagore project is also characterized by its collaborative approach: issuers, home agents and underwriters, investors, custodians are contributing to the design of the new business model in order to ensure a solution aligned to the needs of the market and ready for large-scale adoption. This co-construction phase is facilitated by Pythagore strong market footprint, with, for example, issuers representing around 50% of total exposures.

The project to modernize the NEU CP market represents a decisive step in the evolution of French and European financial markets. Tokenization through the Pythagore project will provide a more efficient, secure and attractive framework fully aligned with the Union for Savings and Investment’s ambitions and international digital asset initiatives.

Project phases

In terms of timing, after a “pilot” development phase, the collective ambition is to have the first issues in production by the end of 2026. The year 2027 will be a ramp-up phase, a phase of automation of operational processes, a prelude to the migration of the market to Euroclear’s new infrastructure, by 2028.