The Bank of Italy has taken a prominent stance in the European Union’s payment modernization debate, with Deputy Governor Chiara Scotti advocating for a tokenized extension of the Single Euro Payments Area (SEPA). In a speech delivered in Rome, Scotti emphasized that tokenization has become increasingly relevant and suggested that authorities should develop a complementary strategy to integrate distributed ledger technology (DLT) into the existing SEPA framework.
Scotti stated that a tokenized SEPA could become an important area for reflection, building on Europe’s shared payments infrastructure, common standards, and established interoperability. She noted that such a framework would help adapt the traditional two-tier monetary system to new technological environments while maintaining regulatory oversight and stability.
The call comes amid rapid growth in cashless transactions across the region. According to European Central Bank (ECB) data, the total value of non-cash payment transactions, including those via SEPA, reached 116 trillion euros in the first half of 2025, a 2.9% year-on-year increase. The push for tokenization is also driven by the rising influence of private digital money, such as stablecoins and tokenized deposits, which could reduce reliance on traditional banking channels and pose challenges to financial stability.
Scotti acknowledged the ongoing work on the digital euro, describing it as the area where analytical work is most advanced. However, she stressed that the broader implications of other digital instruments remain less clear and called for a thorough examination of how tokenized payment systems could coexist with central bank digital currency initiatives. Italy’s proactive role aligns with the ECB’s continued testing of the digital euro, including recent agreements with standard-setting organizations for online payment processing trials.
The Bank of Italy’s initiative signals a careful effort to modernize Europe’s financial infrastructure while preserving trust and stability in the euro system, leveraging tokenization to introduce programmable payments and faster settlement mechanisms.
