Italy urges EU to tokenize SEPA payments for modernization

Italy urges the EU to tokenize SEPA payments, aiming to modernize euro transactions, boost efficiency, and counter stablecoin competition as digital assets reshape Europe's payments.

The Bank of Italy has urged European Union policymakers to consider transforming the Single Euro Payments Area (SEPA) into a tokenized system using blockchain and distributed ledger technology. This move aims to modernize euro payment infrastructure, improve efficiency, and ensure central bank oversight as digital assets and stablecoins become more prevalent. The proposal responds to increasing competition from private digital currencies and highlights the need for programmable, faster, and interoperable payment solutions. Recent European Central Bank (ECB) trials have already processed significant settlement volumes via distributed ledger technology, demonstrating the potential of tokenized systems. Projections indicate that tokenized bank deposits could reach trillions in volume by 2030. The Bank of Italy's initiative has sparked policy debate across Europe, aligning with broader efforts to develop a digital euro and strengthen the region's financial sovereignty and competitiveness.