Bank of Italy Urges EU to Explore Tokenized SEPA Payments System
The Bank of Italy has called on the European Union to explore a tokenized evolution of its core payments infrastructure, signaling a shift in how policymakers approach the next phase of digital finance.
Summary:
- Bank of Italy urges EU to explore tokenized SEPA infrastructure.
- Proposal focuses on preserving monetary control while enabling innovation.
- Move aims to prevent fragmentation from private digital assets.
Speaking on May 4, 2026, Deputy Governor Chiara Scotti outlined a vision in which the existing Single Euro Payments Area framework could be upgraded to support tokenized assets rather than replaced by entirely new systems.
Rethinking Europe’s Payment Architecture
The proposal, detailed in Scotti’s speech titled “Digital Money and the Architecture of Trust,” reflects growing concern among European regulators about the rapid rise of private digital assets, including stablecoins and tokenized bank deposits. These innovations, while promising efficiency gains, risk creating a fragmented financial ecosystem if they develop in isolation from existing payment rails.
Rather than endorsing a wholesale shift to new blockchain-based systems, the Bank of Italy advocates for an incremental approach. By embedding tokenization capabilities into SEPA, the EU could retain a unified payments backbone while enabling new forms of digital money to circulate more efficiently. This strategy would allow both traditional bank deposits and emerging tokenized instruments to coexist within a common infrastructure.
Scotti emphasized that the debate should move beyond speed and cost improvements, which often dominate discussions around distributed ledger technology. Instead, policymakers should focus on system design – specifically, how to ensure interoperability between public and private forms of money. In this framework, central bank money would continue to serve as the ultimate settlement asset, anchoring trust across the financial system.
Balancing Innovation With Monetary Control
At the core of the proposal lies a desire to preserve Europe’s two-tier monetary system, where commercial banks interface with customers while central banks provide the foundation of monetary stability. The Bank of Italy argues that without a coordinated effort, the proliferation of private digital currencies could erode this structure by diverting liquidity into parallel networks.
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A tokenized SEPA could address this risk by offering a regulated environment for digital transactions. It would enable faster and more programmable payments while maintaining oversight through established financial institutions. This approach also aligns with broader efforts by the European Central Bank, which continues to explore the development of a digital euro.
The potential benefits extend beyond monetary policy. A token-enabled payments system could improve cross-border transactions, reduce settlement times, and support advanced use cases such as supply chain finance and tokenized securities markets. By integrating these capabilities into SEPA, the EU could avoid the inefficiencies that arise when multiple, non-interoperable platforms compete for liquidity.
The timing of the proposal underscores the urgency of the issue. As global financial systems evolve, Europe faces increasing pressure to modernize its infrastructure without compromising stability. The Bank of Italy’s recommendation suggests that upgrading trusted systems may offer a more sustainable path than building entirely new ones.
If adopted, the initiative could redefine how digital payments operate across the euro area. It would position SEPA not just as a legacy system, but as a foundation for the next generation of financial innovation – one that combines the reliability of central bank money with the flexibility of tokenized technology.
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Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
