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<p><strong>Bank of Italy Deputy Governor Chiara Scotti has called on the European Union to evaluate tokenized SEPA payments, signaling that one of the eurozone's largest central banks sees blockchain-based settlement as a serious policy question for Europe's payment infrastructure.</strong></p>
<p>The statement positions tokenized payments not as a speculative crypto initiative but as a potential upgrade to the cross-border euro payment rails that hundreds of millions of Europeans use daily. Scotti's call is for evaluation, not implementation, an important distinction that frames this as early-stage policy discussion.</p>
<h2 id="what-scotti-proposed-and-what-it-does-not-mean">What Scotti proposed and what it does not mean</h2>
<p><a href="https://www.bancaditalia.it/chi-siamo/funzioni-governance/direttorio/chiara-scotti/index.html?com.dotmarketing.htmlpage.language=1" rel="noopener noreferrer nofollow">Chiara Scotti</a>, who serves as Deputy Governor of the Bank of Italy, directed her remarks at the EU level. The framing, "should evaluate," suggests she is advocating for a structured review process rather than announcing any confirmed rollout or pilot program.</p>
<p>EU-level evaluation would involve the European Commission, the European Central Bank, and national regulators across all member states. A call from a senior Bank of Italy official carries weight given Italy's role as the eurozone's third-largest economy.</p>
<p>Scotti's proposal follows a pattern of Italian central bank interest in tokenized money. Bank of Italy Governor Fabio Panetta has previously discussed <a href="https://cointelegraph.com/news/bank-of-italy-panetta-tokenized-commercial-bank-money" rel="noopener noreferrer nofollow">tokenized commercial bank money</a> as a complement to central bank digital currencies, suggesting the institution has been building an internal position on how tokenization fits within regulated payment systems.</p>
<h2 id="what-tokenized-sepa-payments-actually-means">What tokenized SEPA payments actually means</h2>
<h3 id="how-sepa-works-today">How SEPA works today</h3>
<p>SEPA, the Single Euro Payments Area, is the <a href="https://www.bancaditalia.it/compiti/sispaga-mercati/sepa/index.html?com.dotmarketing.htmlpage.language=1" rel="noopener noreferrer nofollow">pan-European payment framework</a> that standardizes euro transfers across 36 countries. When a consumer in Germany sends euros to a business in Italy, SEPA is the infrastructure that makes that transfer feel domestic rather than cross-border.</p>
<p>Settlement in the current system relies on batch processing through intermediary banks and clearing houses. While SEPA Instant has reduced transfer times to seconds in many cases, the underlying settlement architecture still involves multi-step reconciliation between financial institutions.</p>
<h3 id="how-tokenization-would-change-the-process">How tokenization would change the process</h3>
<p>A tokenized version of SEPA would represent euro-denominated payments as digital tokens on a distributed ledger. Instead of routing transfers through layers of correspondent banking, tokenized payments could settle on shared infrastructure where both parties see the same record simultaneously.</p>
<p>This is distinct from cryptocurrencies or stablecoins. Tokenized SEPA payments would remain denominated in euros, regulated by existing authorities, and integrated with the banking system. The change is in how settlement works, not in what currency is being moved. Companies like <a rel="noopener noreferrer nofollow">Western Union have begun exploring tokenized payment products</a> on public blockchains, though those efforts target different use cases than sovereign payment rails.</p>
<h2 id="why-eu-officials-may-want-to-evaluate-this-now">Why EU officials may want to evaluate this now</h2>
<h3 id="cross-border-settlement-efficiency">Cross-border settlement efficiency</h3>
<p>SEPA already handles billions of transactions annually across the eurozone. Even marginal improvements in settlement speed and cost reduction at that scale translate into significant savings for banks, businesses, and consumers.</p>
<p>Tokenized settlement could reduce the number of intermediaries required for cross-border euro payments, compressing what currently takes multiple clearing steps into near-atomic transactions where payment and settlement happen simultaneously.</p>
<h3 id="competitive-positioning">Competitive positioning</h3>
<p>The call for EU evaluation comes as multiple jurisdictions explore tokenized payment infrastructure. If Europe delays its assessment while other regions move forward, it risks falling behind on payment technology standards that could define the next generation of cross-border finance.</p>
<p>A formal EU evaluation process would also give regulators a structured framework to assess tokenized payments before private-sector solutions, including stablecoins and tokenized deposits from commercial banks, set de facto standards without public oversight.</p>
<h2 id="benefits-and-risks-the-eu-would-need-to-weigh">Benefits and risks the EU would need to weigh</h2>
<h3 id="potential-benefits">Potential benefits</h3>
<p>Faster settlement is the most cited advantage. Tokenized payment systems can settle in seconds with finality, eliminating the reconciliation delays that exist even in SEPA Instant for certain transaction types.</p>
<p>Programmability is another factor. Tokenized payments can carry embedded logic, enabling conditional transfers, automated compliance checks, or payment-triggered contract execution. For businesses managing complex cross-border supply chains, this could reduce administrative overhead significantly.</p>
<h3 id="risks-and-implementation-hurdles">Risks and implementation hurdles</h3>
<p>Fragmentation is a primary concern. If different EU member states or private institutions develop incompatible tokenized payment systems, the result could be the opposite of SEPA's original goal of unifying European payments.</p>
<p>Regulatory complexity would also increase. A tokenized SEPA system would need to comply with existing payment regulation, anti-money laundering directives, and potentially new frameworks for distributed ledger technology, all while maintaining interoperability with the current banking system.</p>
<p>Integration with legacy infrastructure presents a technical challenge. The existing SEPA network processes enormous transaction volumes reliably. Any tokenized layer would need to match that reliability while adding new capabilities. Exchanges are facing <a rel="noopener noreferrer nofollow">similar integration challenges</a> as they expand support for new digital asset types alongside established trading infrastructure.</p>
<h2 id="faq-tokenized-sepa-payments-and-scotti-s-proposal">FAQ: Tokenized SEPA payments and Scotti's proposal</h2>
<p><strong>Are tokenized SEPA payments the same as a digital euro or CBDC?</strong></p>
<p>No. A digital euro, currently under development by the ECB, would be a central bank digital currency issued directly by the European Central Bank. Tokenized SEPA payments refer to using distributed ledger technology to improve the settlement layer of existing euro payment flows. The two concepts are related but architecturally distinct, and could potentially operate alongside each other.</p>
<p><strong>Has the EU announced a launch of tokenized SEPA payments?</strong></p>
<p>No. Scotti's statement is a call for the EU to evaluate the concept, not an announcement of any program, pilot, or timeline. Any formal evaluation would need to go through EU institutional channels before any implementation could begin.</p>
<p><strong>Why does this matter for banks and payment firms?</strong></p>
<p>If the EU does pursue tokenized SEPA infrastructure, banks and payment processors would need to adapt their systems to interact with token-based settlement. Early evaluation gives the industry time to prepare, contribute to standards discussions, and identify where tokenization adds genuine value versus where existing systems already perform well.</p>
<p>Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making any investment decisions.</p><a href="https://trustscrypto.com/?p=5186" rel="noopener noreferrer nofollow">Read original article on trustscrypto.com</a>

Bank of Italy's Chiara Scotti Urges EU Review of Tokenized SEPA Payments

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