Chiara Scotti, Deputy Governor of the Bank of Italy, has issued a strong call for the European Union to consider tokenizing the Single Euro Payments Area (SEPA) to keep pace with rapid advancements in financial technology. Her remarks have sparked widespread attention across Europe's financial sector, adding new momentum to the ongoing debate on digital currencies and payment system reform.
Urgency of Tokenizing SEPA
Scotti highlighted that new forms of private money—such as electronic money tokens and tokenized bank deposits based on distributed ledger technology (DLT)—are emerging and will profoundly affect the roles of traditional banks and central banks. She warned that without timely adjustments, the current SEPA framework may become unsuitable for a hybrid monetary ecosystem. Tokenizing SEPA is not merely a technical upgrade but a foundational step to reshape Europe’s payment infrastructure from the ground up.
Central Bank Infrastructure Must Adapt
In addressing central bank responses, Scotti stressed that central banks must proactively develop infrastructure capable of supporting the coexistence of public and private money. She envisions a future monetary system where central bank digital currencies (CBDCs) and private tokenized assets operate side by side. Central banks need to prepare now to ensure efficient and secure circulation and exchange between the two forms, avoiding market fragmentation due to technical barriers.
Complementary Path Beyond Digital Euro
Although the European Central Bank (ECB) is actively advancing the digital euro project, Scotti argued that this alone cannot cover all payment innovation needs. She pointed out that existing European payment arrangements—especially SEPA—must also evolve toward tokenization. While the digital euro addresses retail digital currency issuance, SEPA tokenization focuses on enhancing wholesale payments, cross-border settlements, and inter-institutional transaction efficiency. The two developments are complementary and necessary for building a complete European digital payment ecosystem.
Potential Impact on Crypto and Token Markets
Scotti’s remarks also reflect regulators’ growing attention to crypto assets and tokenization trends. Current market data shows volatility in electronic money token-related assets (e.g., EMT tokens recently fell about 14%), reminding regulators to balance innovation with stability during the tokenization process. The Italian central bank’s stance may accelerate formal EU discussions on SEPA tokenization and push forward relevant legislation and standard-setting.
Outlook
The Bank of Italy’s position signals that major European central banks are shifting from observers to drivers of change. If SEPA tokenization is realized, it will greatly enhance the efficiency, transparency, and programmability of the eurozone payment system while providing compliant channels for privately issued tokenized assets. However, technical standards, legal frameworks, cross-border coordination, and privacy protection still require multi-party negotiation. In the coming months, the European Commission and ECB are likely to release more detailed policy signals on this topic.