Bank of Italy deputy urges EU to study tokenized SEPA

Bank of Italy Deputy Governor Chiara Scotti urged EU officials on Monday in Rome to examine a tokenized extension of the Single Euro Payments Area as a complement to ongoing work on the digital euro, arguing tokenization has become more relevant and that authorities should develop a complementary payments strategy.

Scotti argued attention should extend beyond new instruments to how current payment systems might evolve. “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,” she told the audience.

She suggested a tokenized SEPA could allow central bank money and bank-provided services to coexist in tokenized forms, adapting the traditional two-tier monetary system to new technology without replacing established payment rails.

On the digital euro, Scotti described it as “where analytical work is most advanced,” adding that its implications have been examined across monetary policy, financial stability, intermediation, payments efficiency, privacy and inclusion.

Scotti highlighted limits to current evidence on other tokenized instruments. While acknowledging that stablecoins and tokenized deposits “may serve legitimate use cases,” she said their broader effects on the monetary system are “less clear” and require further analysis before wider deployment.

The European Central Bank and the Eurosystem are continuing tests of the digital euro. Earlier this month the ECB signed agreements with European Card Payment Cooperation, Nexo Standards and the Berlin Group to trial online payment processing for the digital euro.

SEPA enables cashless euro transactions across EU countries and several non-EU states. According to ECB data, the total value of non-cash payment transactions, including SEPA payments, reached 116 trillion euros in the first half of 2025, up 2.9% year-on-year. Scotti flagged that scale and existing interoperability as reasons to study a tokenized extension.

She called on regulators, central banks and market participants to begin work on a complementary strategy to examine how existing infrastructure might accommodate token-based instruments while addressing standards, privacy, financial stability and market intermediation.