European Central Bank Executive Board member Piero Cipollone said large-scale stablecoin adoption could weaken the retail deposit base of commercial banks and reshape competition in the traditional banking system. Speaking Friday in Rome at the Federation of Italian Cooperative Banks, Cipollone said digital payments are changing banking while also increasing Europe’s reliance on non-European payment infrastructure. He said banks are already dealing with lower fee income from payments and the loss of transaction data as mobile payment providers expand.
Cipollone argued that broader use of stablecoins and other digital asset payment tools could add to deposit outflow pressure for banks. He said a digital euro would help preserve the role of public money, keep banks involved in the payments ecosystem, and meet changing customer needs. Earlier this week, the ECB selected 36 payment service providers for a 12-month digital euro pilot involving banks, fintech firms, and payment companies. The pilot is scheduled to begin in the second half of 2027, and the ECB has previously said the digital euro could be officially launched as early as 2029 if legislation and testing progress as planned.
European Central Bank (ECB) Executive Board member Piero Cipollone said large-scale adoption of stablecoins could weaken the retail deposit base of commercial banks and alter the competitive structure of the traditional banking system.
Speaking Friday in Rome at the Federation of Italian Cooperative Banks, Cipollone said digital payments are reshaping banking and increasing Europe’s reliance on non-European payment infrastructure. He said banks are already facing lower payment fee income and a loss of transaction data as mobile payment providers expand. As stablecoins and other digital-asset payment tools gain wider use, commercial banks could face added pressure from deposit outflows.
Digital euro seen as a way to preserve public money’s role
Cipollone said the digital euro would help preserve the position of public money, while making sure banks remain part of the payments ecosystem and can respond to changing customer needs.
“A digital euro can both preserve the role of public money and ensure that banks maintain an important role in the payment system,” Cipollone said.
ECB picked 36 firms for a 12-month pilot
Earlier this week, the ECB selected 36 payment service providers to take part in a 12-month digital euro pilot program. Participants include banks, fintech companies, and payment firms. The pilot is set to start in the second half of 2027 and is intended to test the feasibility of a retail central bank digital currency, or CBDC, operating across the euro area.
The ECB has previously said that, if legislation and testing move forward smoothly, the digital euro could be formally issued as early as 2029.
Cointelegraph was cited as the source in the Odaily report.
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