The European Union is being urged to examine whether its current payments architecture needs a tokenised layer. On Monday, Bank of Italy Deputy Governor Chiara Scotti said changes in financial technology are reshaping how money is issued, transferred, and settled, putting Europe’s existing framework under fresh scrutiny.
In her remarks, Scotti said new payment technology can improve speed, programmability, efficiency, and settlement. She also drew a hard line between those technical features and the nature of money itself. What gives money value and acceptability, she said, is trust backed by credible institutions and rules.
SEPA could be reconsidered for a tokenised system
SEPA was created to make cashless euro payments work in a uniform way across participating countries after the launch of the single currency. Scotti said tokenisation is now becoming important enough that Europe should look at how existing payment arrangements might evolve in that direction, including the idea of a tokenised extension of SEPA.
Such a framework could allow public and private forms of money to function together while keeping central banks involved in settlement and oversight. The issue is not simply innovation. It is how to adapt the current structure without reducing the role of public money inside a tokenised financial environment.
Central banks face rising pressure from private digital money
Scotti’s comments come as central banks deal with growing competition from private digital money, tokenised bank deposits, stablecoins, and ledger-based settlement systems. In her view, the policy challenge is to build infrastructure where public and private money can interact without weakening monetary control.
At the retail level, the European Central Bank is already working on the digital euro to preserve the role of public money in digital payments. Scotti’s speech pointed to another front as well: wholesale and bank-linked payment systems may also need policy attention as tokenisation expands.
Banks, payment firms, and stablecoin issuers are in scope
A review of a tokenised SEPA model would carry direct implications for banks, payment companies, stablecoin issuers, and infrastructure providers. If Europe creates common standards for tokenised euro payments, banks could get a clearer route for tokenised deposits and ledger-based settlement. That would shape how market participants build services around euro-denominated digital transfers.
For private issuers, the message is narrower. Tokenised payment systems may be allowed to develop, but only inside frameworks backed by central bank oversight, legal clarity, and interoperability with existing euro infrastructure. The Bank of Italy already operates parts of the euro area payments infrastructure, while ECB Executive Board member Piero Cipollone oversees payments and digital euro work. Scotti’s remarks show that Europe is looking past the digital euro alone and toward the structure that may support tokenised money flows across the region.