European Central Bank (ECB) Executive Board member Piero Cipollone issued a stark warning on Friday that the proliferation of stablecoins could siphon retail deposits away from commercial banks, urging the adoption of the digital euro as a countermeasure. Speaking in Rome at the annual meeting of Italy's Federation of Cooperative Credit Banks, Cipollone pointed to a broader shift in payment habits that already sees banks losing fees and transaction data to mobile platforms.
"If the use of stablecoins increases in the future, banks will also lose retail deposits," Cipollone stated, linking the risk to a payments landscape where cash is rapidly giving way to cards and apps. He noted that mobile payments already exceed one in ten point-of-sale transactions in Ireland, the Netherlands, and Finland, often relegating banks to higher costs and diminished customer insights.
The warning arrives amid significant regulatory upheaval for stablecoins in Europe. Following the closure of the Markets in Crypto-Assets Regulation (MiCA) transition period on 1 July 2026, Tether's USDT was pulled from regulated EU exchange order books due to non-compliance. MiCA mandates that significant stablecoins hold 60% of reserves in European bank deposits—a threshold Tether did not meet. ECB President Christine Lagarde has previously questioned whether euro stablecoins carry financial-stability risks, highlighting that EU rules already push at least 30% of issuer reserves into bank deposits.
Compounding the pressure, Cipollone emphasized that two-thirds of card payments in the euro area now run on non-European schemes, a share that continues to climb. Thirteen of the bloc's 21 countries lack a national card scheme, and more than half have no domestic e-commerce solution, leaving Europe exposed to external payment rails.
To counter these trends, the ECB is advancing the digital euro—a central bank digital currency that would allow users to open interest-free digital euro accounts at their banks, with holding limits to prevent disintermediation. ECB analysis from October 2025 concluded the project poses no risk to banks' liquidity or financial stability, and Cipollone has described it as a collective step to keep deposits within the banking system. Meanwhile, a bank consortium named Qivalis—including ING, UniCredit, BNP Paribas, CaixaBank, and BBVA—is preparing a MiCA-compliant euro stablecoin backed one-to-one, with at least 40% of reserves held in bank deposits. The European Parliament recently endorsed its negotiating position with nearly 70% of the vote, and trilogue talks began on Monday. If legislation passes by year-end, the first digital euro issuance could follow in 2029, with the ECB having already named 36 payment providers for a pilot set to launch in September 2027.
