Deputy Governor Chiara Scotti has urged European policymakers to assess a tokenized version of SEPA, framing it as a way to accelerate euro payments, strengthen financial autonomy and support the next phase of tokenized finance. The proposal positions tokenized payments as programmable infrastructure, not simply a faster version of existing bank transfers.
The idea matters for corporate treasuries, traders and market infrastructure providers because it links payment modernization to central-bank settlement, distributed ledgers and regulatory interoperability. Those choices will shape liquidity, counterparty risk and the viability of on-chain settlement for real-world assets.
Tokenized SEPA Could Shorten Settlement and Add Programmability
A tokenized SEPA model would replace sensitive payment identifiers with non-sensitive tokens recorded on distributed ledgers. That architecture could enable 24/7 near-instant settlement, programmable payments and smart-contract-based execution.
Compared with standard SEPA flows, which can take one to two business days, tokenized settlement could reduce delays and counterparty exposure. It could also extend the capabilities of SEPA Instant by supporting more complex, multi-party transactions.
The practical use cases are clear. Supply-chain payments could be released when milestones are met. Treasury teams could automate reconciliation. Complex settlement instructions could move through “all-or-nothing” execution, reducing bilateral risk.
Tokenization could also support fractionalized real-world assets and open new secondary liquidity pools. But the efficiency gains come with new technical risks, including smart-contract vulnerabilities, DLT integrity issues and operational dependencies across networks.
Central-Bank Settlement Remains the Critical Anchor
Scotti’s proposal fits into the broader Eurosystem agenda. Pontes, a short-term project planned for Q3 2026, aims to connect DLT platforms with TARGET services and provide central-bank money settlement for on-chain transactions.
Appia, a longer roadmap running through 2028, is expected to define standards and interoperability for tokenized finance. Together, those projects will determine whether tokenized SEPA can move beyond policy discussion into production-grade infrastructure.
Regulation already provides part of the framework. MiCA and the DLT Pilot Regime create legal routes for tokenized payment instruments and DLT market infrastructure. Still, cross-border harmonization, GDPR compliance and the legal treatment of tokenized money remain unresolved.
The biggest missing piece is a universally trusted on-chain settlement asset, such as tokenized central-bank money or a digital euro. Without that anchor, tokenized payment systems may struggle to scale with the level of trust required by banks, corporates and institutional desks.
The opportunity is faster settlement with programmable control, but the implementation burden is significant. Firms will need new liquidity models, smart-contract risk controls, AML/CFT integration and clear assurances around settlement finality.
The next milestones are Pontes in Q3 2026 and Appia’s 2028 blueprint. Their outcomes will define whether tokenized SEPA becomes a strategic upgrade to Europe’s payment system or remains a controlled experiment in DLT-based settlement.
