Bank of Italy puts “tokenized SEPA” on Europe’s payments agenda
The push lands as the Eurosystem readies the Pontes DLT-to-TARGET pilot for Q3 2026 and the ECB runs a longer Appia roadmap to 2028.
Bank of Italy Deputy Governor Chiara Scotti urged European financial institutions to assess whether SEPA can be extended into tokenized payments. The comments align with the Eurosystem’s plan to connect DLT markets to TARGET settlement in central bank money as the ECB warns stablecoins could pull funding out of banks and weaken monetary sovereignty.
Key Takeaways
- European institutions were urged to assess whether SEPA can be extended into tokenized payments, with the idea framed as an “important area for reflection.”
- The proposal was raised by Bank of Italy Deputy Governor Chiara Scotti in a Monday speech at a digital assets and monetary policy workshop in Rome.
- The Eurosystem’s Pontes initiative is being prepared as a DLT settlement link to TARGET Services with settlement in central bank money, with a pilot expected by Q3 2026.
- The ECB’s Appia roadmap is set to run through 2028 as policymakers study how tokenized deposits, stablecoins, and central bank money could coexist.
Tokenized SEPA Enters the Eurosystem Conversation
Chiara Scotti, deputy governor of the Bank of Italy, called on European financial institutions to evaluate whether the Single Euro Payments Area can be extended into tokenized payments. In a Monday speech at the Digital Assets and Monetary Policy Transmission workshop in Rome, she described a tokenized SEPA extension as an “important area for reflection.”
The framing matters. SEPA is not a greenfield pilot or a niche sandbox. It is the standardized euro payments framework built around shared rules and interoperability. By putting “tokenized SEPA” on the table, Scotti effectively widened the policy conversation from experimenting with DLT in capital markets to upgrading existing payment standards that already have scale.
That shift sits alongside the Eurosystem’s ongoing work to make tokenized settlement compatible with central bank infrastructure, rather than letting private settlement assets define the rails.
Pontes and Appia: The Public-Money Rails Behind Europe’s Tokenization Push
The near-term infrastructure hook is Pontes, a Eurosystem initiative described as a DLT settlement project designed to link market DLT platforms with TARGET Services and settle transactions in central bank money. A pilot is expected by Q3 2026.
Pontes is the “public money” anchor in the stack. Settlement in central bank money is the institutional answer to the question tokenized markets keep running into: what is the risk-free asset that finalizes payment when assets move on a ledger.
Appia is the longer arc. The ECB is developing Appia as a roadmap for Europe’s tokenized financial ecosystem, expected to conclude in 2028, examining how tokenized deposits, stablecoins, and central bank money could coexist. The timeline signals a multi-year design problem, not an imminent switch in market structure.
Why the ECB Keeps Pointing to Stablecoins: Deposits and Monetary Sovereignty
The ECB’s stablecoin messaging has been consistent and it is not primarily about UX. In a November 2025 report, the ECB warned: “Significant growth in stablecoins could cause retail deposit outflows, diminishing an important source of funding for banks and leaving them with more volatile funding overall.”
A March 4, 2026 working paper sharpened the mechanism, describing a “deposit-substitution mechanism, whereby funds shift from retail bank deposits to digital assets.” That is a bank funding and liquidity story, not just a payments innovation story.
The ECB has also tied the issue to geopolitics and currency control. It said it is exploring ways to bring central bank money onto DLT because adoption of a non-euro stablecoin may have “serious consequences for Europe’s monetary sovereignty,” including diminishing the euro’s role and creating dependency on foreign settlement assets.
Dates and Decision Points Traders Can Track in Europe’s Tokenized Payments Stack
The first signal is whether “tokenized SEPA” becomes a defined workstream with scope, governance, standards, or any timeline beyond Scotti’s call to assess. Without that, it remains a policy prompt rather than an executable program.
Pontes is the next hard milestone. As Q3 2026 approaches, the market will need clarity on pilot eligibility, participant criteria, and how the linkage to TARGET Services is implemented in practice.
ECB communications on bringing central bank money onto DLT are another tell, especially where they explicitly connect the design to concerns about non-euro stablecoins.
Appia updates will matter less for immediate price action and more for longer-cycle positioning. Any early specificity on the coexistence model for tokenized deposits, stablecoins, and central bank money would tighten expectations ahead of the roadmap’s expected 2028 conclusion.
Tokenized SEPA Is a Narrative Shift, Not a Spec Yet
I read Scotti’s “tokenized SEPA” push as a meaningful narrative shift because it points to upgrading an existing, scaled standard, not just running another DLT pilot in isolation. The threshold that matters is whether European institutions turn that reflection into a scoped program with standards and governance, because that is when incumbents start competing on implementation instead of speeches.
The real test is whether Pontes delivers credible central bank money settlement connectivity to DLT venues on the Q3 2026 path, and whether the ECB gets more explicit about how it plans to keep euro settlement from being intermediated by non-euro stablecoins. If those pieces hold, the setup starts to look structural rather than narrative-driven, with public-money rails acting as the counterweight to private settlement assets in Europe.
