ECB: Stablecoins Could Divert Bank Deposits, Digital Euro Can Safeguard Payment Sovereignty

European Central Bank Executive Board member Piero Cipollone has warned that as digital payments evolve, European banks are facing mounting pressures including the loss of fee income and transaction data, the diversion of retail deposits to stablecoins, and deepening dependence on non-European payment infrastructure.

He argues that a digital euro could provide a publicly governed payment infrastructure under European oversight, while preserving banks' roles in customer service, compliance, and transaction data management. The digital euro would not pay interest and would be subject to holding limits to minimize disruption to bank deposits.

The digital euro pilot is scheduled to launch in September 2027, with the earliest possible issuance in 2029 if legislation is completed on time.