Stablecoin growth will erode bank deposits, says ECB’s Cipollone
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
European Central Bank (ECB) Executive Board member Piero Cipollone warned that the growing adoption of stablecoins could reduce commercial banks’ retail deposit base. Speaking at Italy’s Federation of Cooperative Credit Banks, Cipollone highlighted that digital payment innovations are altering the banking landscape and increasing Europe’s dependence on payment infrastructures outside the region. He noted that banks are already losing out on payment fees and transaction data to mobile payment providers.
Cipollone emphasized that the introduction of a digital euro would help maintain the prominence of public money and ensure banks continue to play a central role in the payment ecosystem while meeting customer needs. This statement reflects the ECB’s effort to balance digital innovation with the stability and involvement of traditional banking institutions.
Why it matters
Recently, the ECB selected 36 payment service providers, including banks, fintech companies, and payment firms, to participate in a 12-month pilot project for the digital euro. This pilot, set to start in the second half of 2027, aims to explore how a retail central bank digital currency could function across the euro area. The ECB has indicated that a decision on issuing the digital euro could occur as early as 2029.
This development matters because it illustrates how European authorities are responding to the challenges posed by stablecoins and non-European payment systems, seeking to preserve financial stability and banks’ role while adapting to technological changes in payments.