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ECB warns stablecoin growth could drain euro zone bank deposits
ECB board member Piero Cipollone said stablecoins could strip European banks of retail deposits and noted the ECB has named 36 providers for a digital euro pilot starting in 2027.
The European Central Bank warned that growth in stablecoins could undermine European banks by stripping them of retail deposits, adding to losses banks already face from mobile and other digital payment platforms, Decrypt reports. CB board member Piero Cipollone told a banking conference in Rome that mobile payments are already taking share, and that banks often pay higher fees for those transactions while receiving less payment data. He also said that if stablecoin usage rises, banks would be at risk of losing retail deposits, according to Decrypt. Cipollone pointed to structural gaps in euro area payment infrastructure, including that two-thirds of card payments route through non European schemes and that 13 of 21 eurozone countries lack a national card scheme. He warned the impact could be especially painful for parts of Italy where cooperative bank branches serve smaller towns, because losing payment data could hollow out local lending. The ECB framed the digital euro as the structural response and named 36 payment service providers for a digital euro pilot starting in the second half of 2027. The warning came days after the European Parliament voted 416 to 169 to begin formal legislative negotiations, Decrypt said, as the ECB evaluates how digital payments could further reshape banking.