According to Reuters, commercial bank money is likely to become fully tokenized over time, much like central bank money.
Yet both forms will continue to anchor the global monetary system. That message came this week from Fabio Panetta, Governor of the Bank of Italy and a top European Central Bank policymaker, speaking to the Italian banking association.
Tokenized Bank Money Takes Shape
Panetta’s comments highlight a growing consensus among regulators. Blockchain technology may change how money moves and settles, but it will not replace traditional currencies. Instead, it will modernize them.
Tokenization means representing money as digital tokens on a blockchain or similar system. These tokens can move instantly, settle faster, and operate around the clock. Panetta argued that commercial bank money will eventually follow this path, mirroring central bank initiatives like the digital euro.
A real world example is JPMorgan’s JPM Coin, which allows institutional clients to move tokenized bank deposits across a private blockchain for instant settlement. These systems reduce costs and risk compared to legacy payment rails. According to the Bank for International Settlements, tokenized deposits could significantly lower settlement times in wholesale markets, which today often rely on delayed clearing.
This shift reflects a broader trend. In 2025, several European banks launched pilots for tokenized deposits and on-chain settlement, aiming to keep pace with faster digital asset markets while remaining inside the regulated financial system.
Where Stablecoins Fit In
Panetta was clear that stablecoins will play only a supporting role. Stablecoins are crypto tokens designed to track the value of a currency, usually the US dollar or euro. Their stability depends on a peg, meaning they must be backed by traditional money or safe assets.
There have been 59 new major Stablecoins launched in 2025 pic.twitter.com/4wMasBn1no
— stablewatch (@stablewatchHQ) January 20, 2026
Because of this, Panetta said stablecoins cannot serve as the foundation of the monetary system. They rely on bank money or central bank money to hold their value. Without that backing, trust quickly fades. The collapse of several algorithmic stablecoins in recent years remains a clear reminder of this risk.
Data from the European Central Bank shows that over 90% of stablecoins in circulation are backed by traditional assets such as cash and government bonds. This reinforces Panetta’s point that stablecoins are extensions of the existing system, not replacements for it.
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