European Central Bank (ECB) Executive Board member Piero Cipollone warned that wider stablecoin use would drain retail deposits from commercial banks, casting the digital euro as the safeguard that keeps lenders anchored in a fast-changing payments market. Speaking in Rome on Friday at the annual meeting of Italy’s Federation of Cooperative Credit Banks, Cipollone linked the deposit risk to a broader shift in how Europeans pay. “If the use of stablecoins increases in the future, banks will also lose retail deposits,” he said, placing deposit flight alongside the fees and transaction data that mobile platforms already siphon from lenders.
Payments Drifting Offshore
Cash is losing ground to cards and apps, and mobile payments already exceed one in ten point-of-sale transactions in Ireland, the Netherlands and Finland. When customers pay that way, banks absorb higher fees than debit cards carry and often receive no information about the transaction, losing both revenue and the data that underpins lending decisions.
His warning follows months of turbulence in Europe’s stablecoin market. Tether skipped Market in Crypto Regulation (MiCA) authorisation and saw USDT pulled from regulated EU exchange order books after the framework’s transition period closed on 1 July, in part because the rules require significant stablecoins to hold 60% of reserves in European bank deposits. ECB President Christine Lagarde has questioned whether euro stablecoins carry financial-stability risks, noting that EU rules already push at least 30% of issuer reserves into bank deposits.
The infrastructure picture compounds the pressure, with two-thirds of card payments in the euro area now running on non-European schemes and that share climbing. Thirteen of the bloc’s 21 countries lack a national card scheme, and more than half have no domestic e-commerce solution, leaving Europe reliant on rails it does not control.
Keeping Deposits in the Banking System
The digital euro would let a customer open a digital euro account at their bank and pay across the euro area in shops, online and person to person, with or without an internet connection. Holdings would carry no interest, and calibrated limits would cap wallet balances, giving users little reason to move large sums out of the banking system. ECB analysis published last October found the project poses no risk to banks’ liquidity or to financial stability. Cipollone has elsewhere called the digital euro a collective step for Europe built to prevent disintermediation.
Private issuers are moving on the same terrain, where a bank consortium named Qivalis grouping ING, UniCredit, BNP Paribas, CaixaBank and BBVA is readying a MiCA-compliant euro stablecoin backed one-to-one, with at least 40% of reserves in bank deposits. The European Parliament backed its negotiating position last week with almost 70% of the vote, trilogue talks opened on Monday, and a first issuance could follow in 2029 if legislation clears by year-end. The ECB named 36 payment providers for a pilot launching in September 2027.
