Bank of Italy's Scotti tells banks to start tokenization small

Banks should start investing in tokenized finance on a limited scale now rather than wait for the technology to settle, Bank of Italy Deputy Governor Chiara Scotti said in a speech in Milan on Oct. 23.

"Where investments remain useful across different outcomes, or create future options, it makes sense to start on a limited scale before uncertainty disappears," Scotti told the annual meeting of the Institut International d'Études Bancaires, according to the text published by the Bank of Italy. She said "flexibility and staged commitment can reconcile caution with innovation, without requiring an early bet on a single technological path."

The speech was about building capabilities, not buying crypto. Scotti did not tell banks to invest in digital assets. The investments she named as most useful were "modular systems, common data standards, digital asset expertise, programmable processes and stronger links across treasury, payments and securities functions."

She was also frank about how early the market is, saying "tokenized assets are still a very small fraction of traditional ones and deployment of tokenized deposits also remains limited." Her central argument was that the two-tier system, in which central banks provide the monetary anchor and commercial banks provide money and credit to customers, "remains relevant, even as its institutional and technological setup evolves."

The speech lands in a week when banks and central banks moved on digital money. HSBC said its Hong Kong dollar stablecoin, RedCoin, became available on its PayMe app on Oct. 23. The Monetary Authority of Singapore said the same day that the central banks of Malaysia and Thailand had joined its BLOOM initiative on cross-border settlement in digital money.

In Le Coin's view, Scotti's case is a cautious one: start small, build skills that are useful whatever technology wins, and stay involved while standards are still being set. She warned that waiting "may also mean entering the market when standards, infrastructures and market practices have begun to consolidate."

Sources

• Chiara Scotti, Deputy Governor, Banca d'Italia, "The two-tier system in transition: public foundations, private innovation," annual meeting of the Institut International d'Études Bancaires, Milan, Oct. 23, 2026, https://www.bancaditalia.it/pubblicazioni/interventi-direttorio/int-dir-2026/20261023-scotti/index.html, accessed Oct. 23, 2026, 1:23 p.m. ET.
• HSBC, "HSBC RedCoin launches today," Hong Kong, Oct. 23, 2026, https://www.about.hsbc.com.hk/news-and-media/hsbc-redcoin-launches-today, accessed Oct. 23, 2026, 6:12 a.m. ET.
• Monetary Authority of Singapore, "MAS, Bank Negara Malaysia and Bank of Thailand Partner with Industry to Advance Cross-Border Settlement in Digital Money through BLOOM," Oct. 23, 2026, https://www.mas.gov.sg/news/media-releases/2026/mas-bnm-and-bot-partner-with-industry-to-advance-cross-border-settlement-in-digital-money, accessed Oct. 23, 2026, 6:28 a.m. ET.

Holding the Corner.

Not financial advice.