The idea is that this would help strengthen European payments.
Bank of Italy Deputy Governor Chiara Scotti stated that the European Union (EU) should seriously consider creating a tokenized extension of the existing SEPA payment system.
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According to her, tokenization is becoming increasingly relevant, and Europe needs to think not only about new instruments but also about developing existing infrastructure.
Italy’s Tokenization Proposal
“A tokenized extension of SEPA could become an important area for reflection, building on a distinctive European asset: a common payments framework with scale, shared standards and an established degree of interoperability,” Scotti noted at a conference in Rome.
She emphasized that such an approach would allow the traditional two-tier monetary system to adapt to new technological realities and maintain the euro’s competitiveness in the digital age.
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What About the Digital Euro?
Scotti noted that the most advanced analytical work is currently focused on the digital euro. However, she called for not limiting efforts to this direction alone. She urged exploring the possibilities of tokenized deposits and stablecoins, even though their long-term impact on the monetary system remains less understood.
The European Central Bank (ECB) continues testing the digital euro and recently signed standardization agreements with three organizations for pilot online payments.
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Not Easy, But Worth It
The ECB has previously warned that widespread stablecoin adoption could lead to significant bank deposit outflows, making bank funding more volatile and creating risks to financial stability.
The Bank of Italy’s proposal reflects Europe’s desire to maintain control over payment flows and prevent foreign stablecoins from dominating as asset tokenization grows.
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