TLDR
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Bank of Italy official urges Europe to explore tokenized SEPA payments
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Tokenized SEPA could help Europe modernize cashless euro payments
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Scotti says SEPA can support digital money and central bank control
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Europe weighs tokenized SEPA as digital money changes payments
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Digital euro work expands as SEPA tokenization enters policy debate
Europe faces fresh pressure to modernize SEPA as tokenized finance changes how money moves across digital markets. Bank of Italy Deputy Governor Chiara Scotti said policymakers should assess a tokenized upgrade to Europe’s cashless payments framework. The proposal links payment innovation with central bank control, trust, and financial stability.
Tokenized SEPA Enters Policy Debate
Scotti addressed the issue during a speech in Rome on Monday. She said Europe should not focus only on new payment tools. Instead, authorities should examine how existing systems can support tokenized settlement.
SEPA already gives Europe a common structure for cashless euro payments. It supports transfers across the European Union and several non-EU countries. Therefore, a tokenized SEPA model could build on scale, standards, and interoperability.
The Bank of Italy plays a key role in euro area payment infrastructure. Meanwhile, the European Central Bank continues its work on digital money. Hence, Scotti’s comments add weight to the debate over Europe’s payments future.
Central Banks Weigh Digital Money Risks
Financial innovation has created new forms of private digital money. These include electronic money tokens and tokenized bank deposits on distributed ledgers. These tools may challenge the role of traditional banks.
Scotti said central banks must protect monetary control while allowing useful innovation. She stressed that money depends on trust, institutions, and clear rules. Payment speed and programmability do not create value alone.
The euro area uses a two-tier monetary system that combines central bank money and commercial bank money. Tokenization may force that model to adapt. SEPA could become a bridge between public and private money.
Digital Euro Work Shapes Wider Strategy
The ECB has already advanced technical work on the digital euro. The project aims to keep central bank money relevant in retail payments. It also covers privacy, inclusion, stability, and payment efficiency.
Earlier this month, the ECB signed agreements with three standard-setting bodies. The trial covers online payment processing for the digital euro. Moreover, it supports the broader push for European payment autonomy.
SEPA handled part of a large non-cash payment market in 2025. ECB data showed non-cash transactions reached 116 trillion euros in the first half. Therefore, a tokenized SEPA extension would affect a major payments network.
