The ECB warns: stablecoins threaten bank deposits and financial stability
The growing popularity of stablecoins could trigger a massive outflow of retail deposits from the traditional banking system. This warning came from European Central Bank (ECB) Executive Board member Piero Cipollone during his speech at the annual meeting of the Italian Federation of Cooperative Credit Banks (Federcasse).
Cipollone noted that banks are already feeling pressure from mobile payment services, which are eroding their fee income and control over customer payment data. However, in his view, the most serious challenge will be the expansion of stablecoins, which could directly undermine the resource base of credit institutions. "If the use of stablecoins increases in the future, banks will also lose retail deposits," he emphasized.
Against this backdrop, Cipollone presented the digital euro (CBDC) as a strategic tool for preserving the role of public money in the digital economy. According to him, the project will not only keep banks at the center of the payment ecosystem but also provide the European Union with an independent payment infrastructure. Currently, two-thirds of all card transactions in the EU are processed through systems controlled by non-European players, and this share continues to grow.
ECB analytics show that 13 out of 21 eurozone countries lack a national card scheme, and more than half of the states have no proprietary e-commerce solutions. According to the regulator's calculations, the introduction of a digital euro with strict holding limits and zero interest yield will not pose a threat to banking liquidity or financial stability.
Recall that the ECB recently selected 36 banks and payment companies to participate in a pilot project testing the digital euro. The operational phase will start in the second half of 2027 and last 12 months.
My analysis: The ECB's warning is absolutely justified. Stablecoins, especially those backed by fiat reserves, are essentially direct competitors to bank deposits. If regulators fail to find a way to integrate them into the system or offer a more attractive alternative like CBDCs, we could witness a structural shift in how the population stores and uses money. The question is not whether this will happen, but how quickly and who will manage to adapt.