Bank of Italy Chief Urges Tokenization of Bank Money to Counter Stablecoin Threat

Bank of Italy Governor Fabio Panetta issued a stark warning to commercial banks during an address in Milan, asserting that traditional financial institutions must tokenize their money to remain competitive against the rising tide of stablecoins. "I expect commercial bank money will also become mostly tokenised," Panetta declared, framing distributed ledger technology as inevitable for preserving monetary sovereignty.

The governor singled out U.S.-backed stablecoin initiatives as particularly disruptive, noting Washington's strategic push to cement dollar dominance through digital assets. "They'll definitely develop because there's a big push by the U.S. administration," Panetta observed, highlighting how policymakers view tokenized dollars as tools to reinforce global demand for USD.

European officials now face mounting pressure to accelerate digital currency projects as transatlantic divergence grows. While Panetta reaffirmed traditional money's role as the financial system's anchor, his remarks underscore how blockchain-based assets are reshaping central banking's fundamental assumptions about monetary control and competition.