Chiara Scotti, Deputy Governor of the Bank of Italy, said on May 4 at a joint conference in Rome co-organized by the European Central Bank, the Bank of Italy, the Euro Area Business Cycle Network (EABCN), and the Centre for Economic Policy Research (CEPR) that the EU should seriously consider building a blockchain-compatible version of SEPA, the Single Euro Payments Area. Scotti framed the proposal as an area for reflection rather than a firm policy commitment, but the timing is significant: the ECB is already deep into its own tokenization push, and European banks have jointly established a euro stablecoin initiative targeting commercial launch later this year.

What SEPA Is and Why It Matters

SEPA is the payment integration framework that allows uniform cashless euro transfers across 36 countries in and around the EU, covering credit transfers, direct debits, and card payments. It processed 116 trillion euros in non-cash transactions in the first half of 2025 alone. The Bank of Italy operates portions of this infrastructure. Scotti's argument is that as financial markets shift toward tokenized assets (digital representations of real-world value recorded on a blockchain), SEPA must evolve to accommodate tokenized settlement and remain relevant as the financial landscape changes.

"The European Union should evaluate working on a tokenised version of its payments system to help it keep up with technology changes," Scotti said. She was careful not to overstate the urgency, noting that "what makes something money has not changed: it is accepted because it is trusted, and it is trusted because credible institutions stand behind it." Analysts have noted that this framing implicitly challenges narratives common in decentralized finance communities that see institutional money as obsolete, though Scotti herself did not address that debate directly.

The ECB Is Already Building the Infrastructure

Scotti's remarks fit within a broader EU strategy that the ECB announced in March 2026. The central bank unveiled a two-track tokenization plan called Pontes and Appia. Pontes, expected to launch in September 2026, is a DLT bridge layer (a technical connection between blockchain-based platforms and existing settlement systems) that will allow financial institutions to settle transactions in either on-chain cash tokens or through T2, the Eurosystem's existing real-time settlement system. Appia is a longer-term project to redesign wholesale financial market infrastructure from the ground up, with a blueprint due in the second half of 2028.

ECB Executive Board Member Piero Cipollone, speaking at the same Rome conference, described tokenization as belonging to "a different class of innovation entirely, which economists call general-purpose technology," a category that economists place alongside transformative inventions such as electricity and the internet. He also said that "tokenised central bank money is necessary to offer a risk-free settlement asset in tokenised markets," signaling that the ECB sees its own role as essential rather than optional in any future tokenized system.

The ECB has already taken one concrete step: since March 2026, the Eurosystem has accepted marketable assets issued via DLT in central securities depositories as eligible collateral in its operations.

This push toward tokenized infrastructure also carries a geopolitical dimension. The European Parliament commissioned an analysis identifying Europe's dependence on US-headquartered payment networks as a structural vulnerability to financial sovereignty, a concern Cipollone has cited publicly. That framing helps explain the pace of movement: the EU is not simply modernizing for efficiency but positioning itself to retain monetary autonomy in a payments landscape increasingly shaped by dollar-denominated private instruments. African and South Asian policymakers face an analogous dynamic, where the dominance of dollar-pegged stablecoins such as USDT and USDC raises comparable sovereignty questions for their own financial systems.

The Stakes for Africa and South Asia

For readers outside Europe, the most direct consequence of a tokenized SEPA system would be in remittance corridors. SEPA-zone countries including Italy, Germany, and the Netherlands are among the largest sources of remittances to Africa and South Asia. The United Kingdom, while no longer a SEPA participant following Brexit, remains one of the largest remittance-sending countries to both regions; any question of UK-SEPA interoperability is a separate policy matter not addressed by Scotti's proposal. Nigeria received roughly 19.5 billion dollars from abroad in 2023. India remains the world's top remittance recipient at over 120 billion dollars annually.

Current cross-border transfers between European bank accounts and recipients in Lagos or Nairobi typically take one to three business days and carry fees that average 7.9% on a 200-dollar transfer, a figure drawn from data specific to African corridors. Comparable fee averages for South Asian corridors were not available in the research consulted for this article. A tokenized SEPA system, if designed with interoperability in mind, could compress settlement to near-instant and reduce the cost of intermediation significantly. A Kenya pilot program already demonstrated the potential: stablecoin-based remittances reduced transfer fees from 29% to 2%, according to the Milken Institute.

African markets are not waiting passively for this infrastructure. Sub-Saharan Africa recorded 205 billion dollars in on-chain transaction value between July 2024 and June 2025, up 52% year over year. Stablecoins (cryptocurrencies pegged to a stable asset like the dollar) account for roughly 43% of all crypto volume in the region. Nigeria ranks sixth globally in crypto adoption and Ethiopia ranks twelfth.

The connectivity gap is the central problem. African blockchain ecosystems and European payment rails currently operate in parallel without clean interoperability. A tokenized SEPA framework, particularly one aligned with the Appia standards due in 2028, could serve as a settlement bridge for remittance operators, trade finance platforms, and fintech developers working across both regions. That trade finance dimension deserves specific attention: Africa faces a 331 billion dollar SME financing gap, according to Brookings, and pilots in Kenya and Nigeria have already demonstrated that tokenization of trade receivables and invoice factoring can unlock new capital flows. If settlements could be made against a tokenized euro, euro-denominated trade finance between Europe and Africa could become meaningfully more accessible to smaller businesses on both sides.

There is also a risk worth flagging. While Scotti's remarks addressed monetary sovereignty specifically in the European context, the same dynamic applies with force to countries in the Global South. Euro-denominated digital instruments expanding into African markets could accelerate currency substitution in economies already managing local currency depreciation. This extrapolation from Scotti's Europe-focused remarks is an analytical inference rather than a position she stated directly, but it is a concern regional policymakers should weigh carefully.

What Comes Next

The immediate milestones to watch are the Pontes bridge launch in September 2026 and the EU legislature's vote on the digital euro enabling regulation, which would clear the path for a retail central bank digital currency pilot in the second half of 2027, with possible first issuance as early as 2029. Separately, European banks ING, UniCredit, and BNP Paribas have jointly established Qivalis, a euro-pegged stablecoin initiative, with a commercial rollout planned for the second half of 2026, showing that private-sector tokenized money is advancing independent of regulatory timelines.

Developers and fintech operators building payment products between Europe and Africa or South Asia should treat the Appia consultation process as a key standards-setting moment. Builders should also factor in MiCA (the EU's Markets in Crypto-Assets regulation, already in force), which governs euro-denominated e-money tokens and will likely serve as the regulatory baseline for any tokenized SEPA-linked instrument. The architecture choices made over the next two years will determine whether tomorrow's tokenized euro is interoperable with the rails already being built across the Global South.