European financial institutions should assess whether the Single Euro Payments Area (SEPA) can be extended to tokenized payments, Bank of Italy deputy governor Chiara Scotti said, as policymakers look for ways to ensure euro settlements remain central to digital finance.
Scotti on Monday called the tokenized extension of SEPA “an important area for reflection.” speech at a workshop on digital assets and monetary policy transmission in Rome, concluding that the existing European payments framework provides scale, common standards and interoperability.
Her comments come as the Eurosystem prepares a pilot for Pontes, a settlement initiative based on distributed ledger technology that aims to connect market-based DLT platforms with TARGET services and settle transactions in central bank money. The pilot is scheduled to take place in the third quarter of 2026.
The European Central Bank (ECB) is also developing Appia, a long-term roadmap for a tokenized financial ecosystem in Europe, due for completion in 2028, as policymakers consider how tokenized deposits, stablecoins and central bank money should coexist.
ECB he said was exploring ways to introduce central bank money into the DLT due to concerns about adopting a non-euro stablecoin, which could have “serious consequences for Europe’s monetary sovereignty”, such as reducing the role of the euro and creating dependence on foreign settlement assets.
Banca d’Italia, ECB, EABCN and CEPR workshop on “Digital assets and monetary policy transmission”. Source: Bank of Italy
The ECB says the adoption of stablecoins could result in a shift in bank deposits
The ECB has previously raised concerns about the widespread adoption of stablecoins.
In report published in November 2025, the ECB stated that the widespread adoption of stablecoins could result in households replacing part of their bank deposits with stablecoins, leading to a significant outflow of bank deposits.
“A significant increase in the number of stablecoins could result in an outflow of retail deposits, reducing an important source of funding for banks and leaving them with more unstable funding overall.”
In a working one paper published on March 4, 2026, the ECB highlighted further risks, including that the adoption of stablecoins triggers a “deposit substitution mechanism whereby funds shift from retail bank deposits to digital assets.”
Related: UBS is partnering with five banks to create a Swiss franc stablecoin sandbox
Later on March 23, Piero Cipollone, a member of the ECB’s Executive Board, said that both tokenized deposits and stablecoins need tokenized central bank money as a public settlement anchor to scale Europe’s tokenized financial system, Cointelegraph reported.
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