ECB Warns Stablecoin Expansion Could Erode Bank Deposits

Warning that stablecoin proliferation could erode commercial banks' retail deposit bases, ECB Executive Board Member Piero Ciampolone emphasized that digital euro could preserve banks' payment functionality while maintaining public currency roles. He highlighted how digital payments are reshaping banking, increasing reliance on non-European payment infrastructure, and noted banks already share payment fees and transaction data with mobile payment providers. The ECB selected 36 payment service providers, including banks, fintechs, and payment firms, for a 12-month digital euro pilot starting in late 2027, though issuance remains undetermined with decisions potentially arriving as early as 2029.