The ECB warns that the spread of stablecoins may erode the base of bank deposits, and the digital euro is advancing at an accelerated pace

In comparison, European Central Bank (ECB) Executive Committee member Piero Cipollone (Piero Cipollone) said that large-scale adoption of stablecoins may weaken the retail deposit base of commercial banks and change the competitive landscape of traditional banking systems. Speaking at the Italian Cooperative Banking Federation in Rome on Friday, Cippolone pointed out that digital payments are reshaping the banking industry while increasing Europe's dependence on non-European payment infrastructure.

Banks are currently facing declining payment fee revenue and loss of transaction data due to the development of mobile payment service providers. As digital asset payment instruments such as stablecoins become more popular, commercial banks may face more pressure on deposit outflows. Cipollone stressed that the digital euro will help maintain its status as a public currency and ensure that banks continue to participate in the payment ecosystem while meeting the changing financial needs of customers.

“The digital euro can not only maintain the role of public funds, but also ensure that banks maintain an important role in the payment system.” Cipollone said. On Tuesday, the ECB selected 36 payment service providers to participate in a 12-month pilot project for the digital euro, involving banks, fintech companies, and payment companies. The pilot is scheduled to start in the second half of 2027 to test the viability of a retail central bank digital currency (CBDC) operating in the Eurozone. The ECB previously stated that if relevant legislation and tests go smoothly, the digital euro may be officially issued as early as 2029.

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