ECB Official Warns Stablecoin Growth Could Erode Bank Deposits

European Central Bank Executive Board member Piero Cipollone warned that growing adoption of stablecoins could weaken commercial banks’ retail deposit base. Speaking Friday at an event hosted by Italy’s Federation of Cooperative Credit Banks in Rome, he argued that digital payment methods are fundamentally changing the banking sector and increasing Europe’s dependence on non European payment systems.

Banks Already Losing Ground to Mobile Payment Providers

Cipollone noted that banks are already losing payment-related fees and valuable transaction data to mobile payment companies. He said a digital euro could help address this shift by keeping banks integrated within the broader payments ecosystem while preserving the role of public money in the financial system.

Digital Euro Pilot Program Moves Forward

His comments follow the ECB’s selection this week of 36 payment service providers, including banks, fintech firms and payment companies, to take part in a 12-month digital euro pilot program set to begin in the second half of 2027. The initiative is designed to test how a retail central bank digital currency could function across the eurozone before any final decision on whether to issue one, a decision the ECB has indicated could come as early as 2029.