Bank of Italy Pushes EU Toward Tokenized SEPA Payments Framework

Tokenized SEPA could reshape EU payments while preserving trust, settlement stability, and monetary policy control.

Europe’s payments system may soon face a structural shift as digital assets gain traction in policy circles. Officials at the Bank of Italy are signaling a move toward integrating tokenization into existing financial infrastructure. Recent remarks point to a growing focus on how traditional systems can adapt rather than be replaced.

Europe May Upgrade SEPA With Tokenization, Says Bank of Italy Official

Chiara Scotti, deputy governor of the Bank of Italy, called for a tokenized extension of the Single Euro Payments Area (SEPA). The deputy positioned it as a practical path for Europe’s payments evolution. 

Speaking in Rome, Scotti said policymakers should think beyond new instruments such as stablecoins and central bank digital currencies. She also added that authorities should consider how current frameworks can adapt to digital formats.

SEPA already supports cashless euro payments across the EU and several non-EU countries. Data from the European Central Bank shows that non-cash transactions reached €116 trillion in the first half of 2025, rising 2.9% year-on-year. That scale, combined with shared standards and interoperability, provides SEPA with a strong foundation for tokenization.

Scotti argued that adopting SEPA could help preserve the logic of Europe’s two-tier monetary system, in which central banks and private institutions share roles. A tokenized version could maintain settlement in central bank money while allowing new forms of programmability and faster transfers.

Italy Highlights Trust and Design as Critical in Digital Money Shift

Broader remarks from the Bank of Italy place tokenization within a wider debate about trust and monetary control. Digital assets such as stablecoins, tokenized deposits, and CBDCs differ not only by technology but also by institutional backing and settlement design. 

Officials stressed that trust remains the foundation of money, regardless of whether it exists as physical cash or digital entries. Stablecoins, often issued by private entities, may trade away from their intended value if redemption mechanisms weaken. 

On the other hand, tokenized deposits can remain tied to the banking system and central bank settlement, reducing price instability risks. Design features like convertibility and reserve backing shape how these instruments function.

Tokenized money could affect bank funding, liquidity conditions, and demand for safe assets. Shifts in how money circulates may also influence how policy rates pass through to the real economy. Outcomes depend on issuer type, settlement structure, and regulatory frameworks rather than technology alone.

Scotti also pointed to the digital euro as the most advanced area of policy work within the Eurosystem. Ongoing ECB trials aim to assess its impact across monetary policy, financial stability, and payment efficiency. Other instruments, including stablecoins, still carry uncertain system-wide effects.

European policymakers now face a timing challenge. Decisions made early in the design of tokenized systems may shape the region’s monetary structure for years.

The post Bank of Italy Pushes EU Toward Tokenized SEPA Payments Framework appeared first on Live Bitcoin News.