A senior official at the Bank of Italy has advocated for the European Union to consider a tokenized expansion of its existing cashless payment infrastructure. Chiara Scotti, Deputy Governor of the Bank of Italy, stated that tokenization’s increasing relevance warrants the exploration of a “complementary strategy” by European authorities.
Key Takeaways
- Bank of Italy Deputy Governor Chiara Scotti suggested the EU explore a tokenized version of its Single Euro Payments Area (SEPA).
- Scotti emphasized that tokenization has become a more significant consideration for financial systems.
- Such a tokenized SEPA framework could help adapt the traditional two-tier monetary system to emerging technologies.
- The Bank of Italy official also highlighted the advanced analytical work surrounding the digital euro.
- The potential implications of stablecoins and tokenized deposits for the broader monetary system remain less clear, according to Scotti.
During a recent address in Rome, Scotti indicated that attention should be directed not only towards novel financial instruments but also towards the evolution of Europe’s current payment systems. She proposed that a “tokenized extension of SEPA” could represent a significant area for deliberation, leveraging Europe’s established common payment framework which benefits from scale, shared standards, and existing interoperability.
This proposed framework could facilitate the adaptation of the established two-tier monetary system principles to new technological environments. SEPA, the Single Euro Payments Area, currently facilitates cashless euro transactions across the EU and select non-EU nations. Data from the European Central Bank (ECB) indicates that in the first half of 2025, the total value of non-cash payment transactions, including those conducted via SEPA, reached €116 trillion ($135.7 trillion), marking a 2.9% increase year-on-year.
Regulatory Precedent and the Digital Euro
Scotti also referred to the digital euro as the domain where analytical efforts are most advanced. She noted that its potential implications have been thoroughly assessed across various public policy dimensions, including monetary policy, financial stability, financial intermediation, payment efficiency, user privacy, and social inclusion, as well as its coexistence with private financial solutions. This level of detailed examination has not yet been applied to other digital instruments.
While acknowledging that stablecoins and tokenized deposits might serve valid use cases, Scotti expressed that their broader impacts on the monetary system are “less clear.” The ECB and the Eurosystem are continuing their work on piloting the digital euro. Earlier in the month, the ECB formalized agreements with three standard-setting organizations—European Card Payment Cooperation, Nexo Standards, and Berlin Group—to conduct trials for online payment processing using the digital euro.
Based on materials from : www.theblock.co