ECB’s Cipollone says stablecoins could erode bank deposits as digital euro advances

European Central Bank Executive Board member Piero Cipollone said wider stablecoin adoption could weaken commercial banks’ retail deposit base and further reduce payment revenues and customer data, reinforcing the ECB’s case for a digital euro as Europe moves toward legislation and pilot testing. He also warned that Europe’s payments infrastructure is increasingly reliant on foreign providers, with roughly two-thirds of euro area card payments processed through non-European schemes. Cipollone said banks are already under pressure from changing payment habits as consumers shift toward smartphones, digital wallets and third-party platforms, and argued that stablecoins could intensify that trend by moving funds outside the traditional deposit system altogether. The ECB has said any digital euro would be issued by the central bank while commercial banks would remain at the center of customer onboarding and payment services, with safeguards such as zero remuneration and holding limits intended to avoid materially harming bank liquidity. The remarks come as European lawmakers continue work on digital euro legislation after the European Parliament approved its negotiating position, opening formal talks with the European Commission and Council. The ECB has also selected 36 payment service providers for a pilot scheduled to begin in 2027. The debate reflects a broader policy divide with the United States, where lawmakers have focused more on regulating private stablecoins than developing a retail central bank digital currency.