European Central Bank Executive Board member Piero Cipollone said on July 17 in Rome that if stablecoin usage continues to expand, banks could lose retail deposits.
In a speech titled "The cooperative spirit at the heart of the digital euro," Cipollone said, "If stablecoin use increases in the future, banks will at the same time lose retail deposits." The global stablecoin market is currently worth about $300 billion.
Retail deposit outflows and bank funding
Cipollone’s argument was that if stablecoins become a mainstream tool for payments and savings, retail deposits now sitting inside the banking system could move into on-chain wallets. That would directly weaken the stability of banks’ funding sources and their ability to lend.
He also said the euro area’s payments infrastructure remains limited in terms of autonomy. Around two-thirds of card payments in the euro area currently rely on non-European payment channels, and 13 of the 21 euro area countries do not have their own national card scheme.
EU stablecoin legislation is now in talks
The warning came as the European Union’s stablecoin bill moved into legislative negotiations. EU member states and the European Commission formally launched talks on July 9, with the goal of reaching an agreement by the end of 2026. The first issuance of the digital euro is expected in 2029.
There are currently 36 payment service providers participating in the digital euro pilot.
Mobile payments exceed 10% of POS transactions in some countries
Cipollone also cited shifts in payment behavior across the euro area. In Ireland, the Netherlands and Finland, mobile payments now account for more than 10% of in-store POS transactions, a sign that consumer behavior has already been moving toward digital payments.
His position was that the EU needs clear legislative output on stablecoins and faster progress on the digital euro project to preserve the autonomy of the euro payments system.