European Central Bank Executive Board member Piero Cipollone has warned that the rising use of stablecoins could diminish commercial banks’ retail deposit base.
Stablecoins and payment sector shifts
Speaking on Friday at the Federation of Cooperative Credit Banks in Rome, Cipollone said digital payments are transforming the banking landscape and making Europe more dependent on payment networks beyond its borders.
He explained that commercial banks are already losing revenue from payment fees and transaction data to mobile payment providers. This shift, according to Cipollone, poses challenges for traditional banks as more consumers opt for digital and mobile payment solutions.
Stablecoins, which are cryptocurrencies typically backed by assets such as fiat currencies, have seen growing acceptance for both domestic and international transactions. Cipollone argued that widespread adoption of stablecoins could intensify the trend of banks losing their traditional deposit base.
Mini dictionary: Piero Cipollone is an Executive Board member of the European Central Bank (ECB), responsible for shaping monetary and banking policies within the euro area.
“As digital euro would both preserve the role of public money and ensure banks remain involved in the payments ecosystem while continuing to meet their customers’ needs,” Cipollone stated.
Digital euro pilot and future plans
On Tuesday, the ECB selected 36 payment service providers—including banks, fintech firms, and payment companies—to participate in a 12-month digital euro pilot. The pilot is scheduled to begin in the second half of 2027.
This initiative is designed to evaluate how a retail central bank digital currency (CBDC) could function throughout the euro area. The ECB has indicated that a final decision on issuing a digital euro could be made as early as 2029, depending on the pilot’s outcomes.
The digital euro project aims to maintain European autonomy in the payments ecosystem while addressing the evolving needs of consumers amid rapid innovation in digital finance.
Fintech companies and established banks are expected to contribute significant insights during the pilot phase, which will inform ECB policy on retail digital currency development.
The ECB’s efforts are part of a broader trend among central banks globally, as several jurisdictions explore launching their own digital currencies to modernize payment systems.
Experts state that the success of the digital euro could influence both monetary policy and the competitive dynamics between traditional banks and digital-native financial players.
| Milestone | Date |
|---|---|
| Digital euro pilot start | Second half of 2027 |
| Potential issuance decision | 2029 |
As the digital euro pilot takes shape, authorities and market participants are closely monitoring how central bank digital currency development could reshape the future of banking and payments in Europe.
