Scotti (Bankitalia), strategic challenge for banks from tokenization

The tokenization of financial services promises to redesign the financial value chain, posing a series of strategic challenges for banks: "waiting for the new ecosystem to be fully defined can reduce some risks, but also limit the ability to learn and influence choices. Participating today means building knowledge and contributing to defining the future ecosystem".

Chiara Scotti, deputy director general of the Bank of Italy, said this at the Institut International d'Études Bancaires.

Scotti recalled that public institutions are already adapting with initiatives such as the digital euro - which would extend the public monetary anchor to digital retail payments - Pontes and Appia, which in wholesale markets respond to the need to ensure that central bank money, liquidity and collateral remain available and effective, as securities and transactions migrate to new platforms.

However, "public initiatives can only lay the foundation. Which services customers will use, which use cases and business models will create value will depend on private intermediaries," Scotti said. For banks, a priority will be their strategic positioning: "identifying which segments to control, which distinctive activities to maintain, where to preserve the direct relationship with the customer and which functions to leave to platforms and other subjects". Furthermore, "ensure that commercial bank money can continue to play a central role even in new digital environments, in the forms most suited to different use cases; understand where liquidity will be concentrated, how it can flow between traditional and tokenized markets and whether collateral can be mobilized between different networks. Finally, in defining standards, banks will be able to "contribute to their design before choices made by others are consolidated".