ECB’s Cipollone warns stablecoins risk draining European bank deposits

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European Central Bank Executive Board member Piero Cipollone warned on Friday that growing stablecoin adoption risks draining retail deposits from commercial banks, making the case that a digital euro would preserve the role of public money while keeping banks at the center of Europe’s payments system.

ECB's Cipollone warns stablecoins risk draining European bank deposits

Stablecoin Threat to Banking

Speaking at the annual meeting of Italy’s Federation of Cooperative Credit Banks (Federcasse) in Rome, Cipollone argued that without a digital counterpart to cash, central bank money could become marginalized as payments shift increasingly online. He has previously warned that if dollar-denominated stablecoins become more widespread, European banks “could lose fees, data and deposits”. Ccentralbanking Fforklog Eeconostream-media

The concerns echo those raised by Bank of America CEO Brian Moynihan, who earlier this year cautioned that approximately $6 trillion in deposits could migrate to stablecoins and related products, potentially diminishing lending capabilities across the banking sector. YYahoo Finance

Digital Euro Pilot Takes Shape

Cipollone reiterated that the ECB has selected 36 payment service providers — including Deutsche Bank, Revolut, Stripe, and Worldline — for a 12-month digital euro pilot set to begin in September 2027. The pilot will test account setup, person-to-person payments, merchant acceptance, and offline functionality across the ECB and 19 national central banks. BBitcoin Eeconomyglobal Kkucoin Eeconostream-media

Under the proposed design, banks would continue to hold customer relationships and transaction records while distributing the digital euro on behalf of the Eurosystem, Cipollone said. Eeconostream-media Rreuters

Legislative Path to 2029

The European Parliament voted on July 9 to authorize trilogue negotiations on the digital euro legislation, with 416 votes in favor, 169 against, and 22 abstentions. Rapporteur Fernando Navarrete Rojas will lead Parliament’s negotiating team, with a first round of talks with the Irish Council Presidency expected shortly. Lledgerinsights EEuropa

If the legislative process concludes by year-end, Cipollone said the digital euro could first be issued in 2029. The proposed framework would cap individual holdings, require most businesses to accept the digital euro, and embed privacy safeguards including zero-knowledge proof technology to verify transactions without exposing personal data. EEuropa EEuropa Rrfi Eeconostream-media