ECB Pushes Digital Euro, Warns Stablecoins Could Erode Bank Deposits
Summary
- The ECB said wider adoption of stablecoins could erode the deposit base of commercial banks.
- The ECB said the digital euro would preserve the role of public money while ensuring banks remain part of the payments ecosystem.
- The ECB is moving ahead with a digital euro pilot program involving 36 payment service providers and said it could decide as early as 2029 whether to issue the digital euro.
Forecast Trend Report by Period
The European Central Bank has warned that the spread of stablecoins could weaken commercial banks’ deposit base.
Cointelegraph reported on July 17 that ECB Executive Board member Piero Cipollone made the remarks in a speech to Italy’s federation of cooperative credit banks. He said the expansion of digital payments is reshaping the financial system and deepening Europe’s reliance on non-European payment infrastructure.
Banks are already losing payment fees and transaction data to mobile payment providers, Cipollone said. As stablecoin adoption grows, commercial banks’ retail deposit base could be further eroded. He added that a digital euro would preserve the role of public money while ensuring banks remain part of the payments ecosystem and continue to meet customer demand. The digital euro is a central bank digital currency, or CBDC, that the ECB is seeking to introduce.
Earlier this month, the ECB selected 36 payment service providers, including banks and fintech companies, to participate in a digital euro pilot program scheduled to begin in the second half of 2027. The project aims to test how the digital euro would operate across the euro area before any final decision on issuance.
The ECB has previously said it could decide as early as 2029 whether to issue the digital euro.
