Europe should weigh tokenized SEPA payments, Bank of Italy official says
European policymakers are evaluating tokenized SEPA payments to maintain euro dominance in digital finance and counter stablecoin competition. The Bank of Italy and ECB are developing frameworks like Pontes and Appia to settle transactions on blockchain using central bank money. This strategy aims to prevent non-euro stablecoins from undermining monetary sovereignty and triggering bank deposit outflows.
Key takeaways
- 1Bank of Italy proposes tokenized SEPA payments to maintain euro dominance and counter non-euro stablecoin competition in digital finance.
- 2ECB's Pontes pilot launches Q3 2026 to settle blockchain transactions in central bank money; Appia roadmap concludes in 2028.
- 3ECB warns widespread stablecoin adoption could trigger significant bank deposit outflows, threatening euro's monetary sovereignty.
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Why it matters
Europe's push for tokenized central bank money directly impacts how global digital payments evolve and could influence India's own CBDC strategy. If euro-tokenized systems gain traction, it pressures other nations including India to accelerate digital rupee adoption and blockchain settlement frameworks to maintain monetary autonomy and prevent foreign stablecoin dominance.
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