ECB Board Member Cipollone Warns Stablecoin Growth Could Drain European Bank Deposits

Jul 17, 2026

ECB board member Piero Cipollone warns that rising stablecoin adoption could drain retail deposits from European banks, hollowing out local lending. To counter this and reclaim payment sovereignty from non-European schemes, the ECB is advancing a digital euro. A 12-month pilot with 36 payment providers is set for late 2027, while lawmakers target a legislative deal by late 2026 ahead of a projected 2029 launch.

Stablecoin threat to bank deposits

▪Under the Markets in Crypto-Assets regulation, euro stablecoin issuers must hold 30% of reserves in bank deposits, rising to 60% for significant issuers.
▪If stablecoin holdings remain uncapped, banks may have to replace cheap deposit funding with more expensive wholesale funding, tightening lending standards.
▪The global stablecoin market is valued at approximately $300 billion and is almost entirely denominated in United States dollars.
▪European Central Bank board member Piero Cipollone warned on July 17, 2026, that stablecoin growth could strip European banks of retail deposits.

Mobile payment fee erosion

▪European banks lose transaction fees and customer data when retail clients shift from traditional debit cards to mobile payment platforms.
▪Mobile payments now exceed one in ten point-of-sale transactions in Ireland, the Netherlands, and Finland.

Digital euro pilot program

▪The digital euro pilot is scheduled to begin in the second half of 2027 and will run for 12 months testing a beta version.
▪The European Central Bank selected 36 payment service providers, including Deutsche Bank, UniCredit, and Revolut, for a digital euro pilot.
▪The digital euro pilot will be hosted alongside 19 of the eurozone's 21 national central banks, excluding Malta and Bulgaria.

European payment infrastructure dependence

▪Two-thirds of card payments in the euro area route through non-European schemes, and 13 of 21 eurozone countries lack national card schemes.
▪The European Central Bank is advancing infrastructure projects named Pontes, launching in Q3 2026, and Appia to support tokenized finance.

Digital euro legislative timeline

▪The European Central Bank does not expect to issue a digital euro before 2029 at the earliest.
▪The European Parliament voted 416 to 169 to begin formal legislative negotiations on the digital euro, targeting a deal by the end of 2026.