Key Highlights
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Italian central bank executive advocates for tokenized evolution of SEPA infrastructure
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Proposed upgrade aims to modernize Europe’s cashless euro transaction framework
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Deputy Governor emphasizes maintaining central bank oversight alongside innovation
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Digital currency developments prompt reassessment of European payment structures
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Initiative aligns with broader digital euro development efforts across the eurozone
European financial authorities are confronting mounting calls to transform SEPA infrastructure as blockchain-based finance reshapes digital transaction landscapes. Chiara Scotti, serving as Deputy Governor at the Bank of Italy, urged regulatory bodies to evaluate incorporating tokenization into Europe’s established cashless payment architecture. Her proposal connects payment system advancement with preserving monetary authority oversight, institutional credibility, and economic stability.
Italian Official Brings Tokenization to Forefront
Speaking at a Rome conference on Monday, Scotti challenged conventional approaches to payment modernization. She argued that European authorities must look beyond creating entirely new payment mechanisms. Rather, policymakers should investigate adapting current infrastructure to accommodate tokenized transaction settlement.
The Single Euro Payments Area provides Europe with unified architecture for non-cash euro transactions. This network enables cross-border transfers throughout EU member states plus additional participating nations. Consequently, implementing tokenization within SEPA could leverage existing reach, regulatory frameworks, and system compatibility.
As a significant contributor to eurozone payment operations, the Bank of Italy influences infrastructure development. Simultaneously, the European Central Bank advances initiatives around digital currency. Thus, Scotti’s public position elevates ongoing discussions about Europe’s payment evolution.
Monetary Authorities Navigate Digital Currency Challenges
Recent financial technology developments have spawned alternative digital money formats. Examples include electronic money instruments and tokenized commercial bank deposits operating on blockchain networks. Such innovations potentially disrupt conventional banking intermediation.
Scotti emphasized that central banking institutions must preserve monetary policy effectiveness while enabling beneficial technological progress. She highlighted that currency value stems from institutional trust, regulatory frameworks, and economic guarantees. Transaction velocity and programmable features alone cannot establish monetary credibility.
The eurozone operates through a dual-layer monetary architecture integrating central bank reserves with commercial banking deposits. Tokenization developments may necessitate structural adjustments to this framework. SEPA infrastructure could facilitate integration between sovereign and private digital money forms.
ECB Digital Currency Initiatives Influence Broader Vision
The European Central Bank has progressed significantly in digital euro technical development. This initiative seeks to ensure central bank-issued currency remains competitive in consumer payment markets. Design considerations encompass user privacy, financial accessibility, systemic stability, and transaction effectiveness.
Recent ECB announcements revealed partnerships with three standardization organizations. These collaborations focus on testing online payment infrastructure compatible with digital euro deployment. Additionally, they reinforce European strategic goals for payment system independence.
SEPA currently processes substantial volumes within Europe’s non-cash payment ecosystem. ECB statistics indicated non-cash transactions totaled 116 trillion euros during the initial six months of 2025. Accordingly, integrating tokenization capabilities into SEPA would transform a critical financial network.
