Italy’s central bank urges the EU to develop a tokenized version of SEPA to respond to the erosion of the banking system by private stablecoins

On May 5, Chiara Scotti, Vice President of the Bank of Italy (Banca d’Italia), urged the EU to assess the development of a “tokenized version” of SEPA (Single Euro Payments Area) and to address how private tokenized money (e-money tokenized instruments, tokenized bank deposits) could erode the traditional banking system. Cointelegraph compiled a report on Scotti’s remarks, saying that a key priority is building infrastructure that enables interoperability between public-sector and private forms of money—so central banks can maintain control over monetary policy without hindering innovation.

What is SEPA? The backbone infrastructure for EU cross-border payments

SEPA (Single Euro Payments Area) is the EU’s cross-border retail payment network, covering 36 countries, about 520 million people, and handling euro-denominated bank transfers, direct debits, and card payments. The core value of SEPA is that “cross-border payments are as cheap, fast, and predictable as domestic payments,” serving as a foundational infrastructure for European financial integration.

However, SEPA’s technical backbone still relies on the traditional “bank ledger interconnection” structure—each cross-border payment still needs to be settled through the internal account systems of the receiving and sending banks, leaving a significant gap versus today’s “on-chain native instant settlement.” Scotti’s call is to upgrade SEPA to be tokenized as well—preserving EU payment integration, but building on blockchain/DLT at the underlying layer.

Motivation: Countering the “erosion” caused by private tokenized money

In her speech, Scotti explicitly pointed out the impact of new types of private tokenized money on the traditional banking system:

E-money tokens (i.e., stablecoins)—directly competing for users from bank deposits

Tokenized bank deposits—although they are still bank deposits, their underlying record-keeping is on DLT, changing traditional clearing processes

Her core concern is that “if the EU central banks do not proactively build public-sector tokenized payment infrastructure, tokenized money issued privately will take the lead, weakening the central bank’s transmission of monetary policy.” This logic is rooted in the same arguments as the CLARITY Act pushback by U.S. banking on 5/4—on both sides, central bankers/traditional bankers are worried that stablecoins/tokenized money would weaken the traditional banking monopoly over deposits.

EU tokenization path: Aligning with the digital euro and actions by other member states

This case is happening amid a series of EU “tokenized infrastructure” moves:

The European Central Bank (ECB) is advancing the “digital euro,” with a Q3 2026 pilot launch and possible official issuance in 2029

In early May—Sabadell and Bankinter in Spain joined the European stablecoin alliance (the second batch of banks after UniCredit in Italy)

In early May—the euro area finance ministers collectively requested that Anthropic open up the Mythos AI model to European banks (security/AI axis)

May 5 (this case)—the Bank of Italy calls for SEPA tokenization

Taken together, these moves outline the EU’s dual-track strategy: central-bank-led “public-infrastructure tokenization” (SEPA, the digital euro) + commercial banks’ “compliant stablecoin alliance.” The two tracks run in parallel, aiming to avoid being squeezed in a world dominated by dollar stablecoins (USDC, USDT) and dollar tokenized assets.

For European industry, Scotti’s call is a “catch-up signal”—the EU is clearly behind the U.S. on the tokenization infrastructure track (DTCC will be launching tokenized U.S. Treasuries in May) and behind the UK (LSEG’s digital settlement exchange is already operating). With the Bank of Italy speaking up now, the goal is to push tokenized SEPA from the “experimental phase” to a “concrete policy agenda.”

This article The Bank of Italy calls on the EU: develop a tokenized version of SEPA, and address how private stablecoins erode the banking system first appeared on Chain News ABMedia.