What did the Bank of Italy say about tokenised SEPA payments?

Chiara Scotti, Deputy Governor of the Bank of Italy, said Europe should assess extending SEPA into tokenised payments. She framed it as a way to maintain euro-based settlement in digital finance. This signals growing interest from central banks in modernising payment infrastructure.

What is SEPA and why is tokenising it important?

The Single Euro Payments Area (SEPA) is Europe’s unified payment system enabling fast euro transfers across countries. Tokenising SEPA would mean moving payments onto blockchain or distributed ledger systems. This could improve efficiency while keeping euro transactions central to digital finance.

Why are European policymakers concerned about stablecoins?

The European Central Bank (ECB) is worried that non-euro stablecoins could reduce the euro’s role in global finance. If widely adopted, stablecoins could shift payments and savings away from traditional banking systems. This creates risks to monetary sovereignty and financial stability.

How could stablecoins impact European banks?

The ECB has warned that stablecoin adoption could lead to deposit outflows from banks. This means households might move money from bank accounts into digital assets. For banks, that could reduce a key source of funding and increase reliance on more volatile funding channels.

What is the Pontes project and why does it matter?

Pontes is a planned ECB pilot that uses distributed ledger technology (DLT) to connect financial markets with central bank settlement systems. It aims to enable transactions to settle in central bank money on blockchain rails. The pilot is expected by Q3 2026 and could be a key step in tokenised finance adoption.

What is the ECB’s Appia project?

Appia is the ECB’s longer-term roadmap for building a tokenised financial ecosystem in Europe, expected to run until 2028. It focuses on how tokenised deposits, stablecoins and central bank money will interact. This shows Europe is planning for a multi-layered digital finance system.

How might tokenised SEPA payments affect the euro?

Tokenised SEPA could help preserve the euro’s dominance in digital transactions by keeping settlement in central bank money. This would reduce reliance on foreign or private digital currencies. For investors, it signals a defensive strategy to protect the euro’s global role.

What are the potential benefits of tokenising Europe’s payment system?

Tokenisation could improve speed, transparency and interoperability of payments across Europe. It may also enable new financial products and more efficient cross-border transactions. However, implementation risks and regulatory complexity remain.

Bank of Italy flags tokenised SEPA payments debate

Written by Jon CuthbertPublished May. 6 2026Last Updated May. 6 2026

Chiara Scotti, Deputy Governor of the Bank of Italy, said Europe should assess extending SEPA into tokenised payments to maintain euro-based settlement in digital finance.

Scotti said the Single Euro Payments Area offers scale, interoperability and shared standards, making it a strong foundation for a tokenised payments framework as policymakers respond to rising stablecoin competition.

“A tokenised extension of SEPA is an important area for reflection,”

Said Bank of Italy Deputy Governor, Chiara Scotti.

The comments come as the European Central Bank prepares a pilot for Pontes, a distributed ledger initiative linking market platforms with TARGET Services to enable settlement in central bank money.

The ECB is also developing Appia, a longer-term roadmap for Europe’s tokenised financial ecosystem expected to conclude in 2028, as it evaluates how deposits, stablecoins and central bank money coexist.

The central bank has warned that stablecoin adoption could shift funds away from traditional bank deposits, potentially weakening a key funding source for banks and increasing financial system volatility.

ECB officials, including Executive Board member Piero Cipollone, have said tokenised deposits and stablecoins will require central bank money as a settlement anchor to scale Europe’s digital financial system.