European monetary establishments ought to assess whether or not the Single Euro Funds Space (SEPA) will be prolonged into tokenized funds, Financial institution of Italy Deputy Governor Chiara Scotti mentioned, as policymakers search for methods to maintain euro-denominated settlement central to digital finance.
Scotti known as a tokenized extension of SEPA an “essential space for reflection” throughout a Monday speech on the Digital Belongings and Financial Coverage Transmission workshop in Rome, saying Europe’s current funds framework presents scale, shared requirements and interoperability.
Her feedback come because the Eurosystem prepares a pilot for Pontes, a distributed ledger expertise settlement initiative designed to hyperlink market DLT platforms with TARGET Companies and settle transactions in central financial institution cash. The pilot is predicted by the third quarter of 2026.
The European Central Financial institution (ECB) can be growing Appia, a longer-term roadmap for Europe’s tokenized monetary ecosystem that’s anticipated to conclude in 2028, as policymakers weigh how tokenized deposits, stablecoins and central financial institution cash ought to coexist.
The ECB mentioned it was exploring methods to deliver central financial institution cash onto DLT resulting from considerations over the adoption of a non-euro stablecoin, which can have “severe penalties for Europe’s financial sovereignty,” equivalent to diminishing the euro’s function and making a dependency on overseas settlement property.
Banca d’Italia, ECB, EABCN, and CEPR Workshop on‘Digital Belongings and Financial Coverage Transmission.’ Supply: Financial institution of Italy
ECB says stablecoin adoption could shift financial institution deposits
The ECB has beforehand outlined considerations associated to widespread stablecoin adoption.
In a report printed in November 2025, the ECB mentioned that widespread stablecoin adoption may even see households exchange a few of their financial institution deposits with stablecoin holdings, resulting in important financial institution deposit outflows.
“Important progress in stablecoins might trigger retail deposit outflows, diminishing an essential supply of funding for banks and leaving them with extra risky funding total.”
In a working paper printed on March 4, 2026, the ECB highlighted additional dangers, together with that stablecoin adoption induces a “deposit-substitution mechanism, whereby funds shift from retail financial institution deposits to digital property.”
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Afterward March 23, Piero Cipollone, a member of the ECB’s Govt Board, mentioned that each tokenized deposits and stablecoins want tokenized central financial institution cash as a public settlement anchor for scaling Europe’s tokenized monetary system, Cointelegraph reported.
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