European Central Bank Executive Board member Piero Cipollone warned on Friday that wider stablecoin use would drain retail deposits from commercial banks. Speaking at the annual meeting of Italy's Federation of Cooperative Credit Banks in Rome, Cipollone positioned the digital euro as the safeguard that keeps lenders anchored in a fast-changing payments market. The warning addresses a broader shift in European payment behavior, where mobile payments already exceed one in ten point-of-sale transactions in Ireland, the Netherlands and Finland, with banks losing both fee revenue and transaction data to mobile platforms. Cipollone linked the deposit risk to existing pressures from digital payment systems that already siphon fees and customer data from traditional lenders. The comments follow months of regulatory turbulence after Tether skipped MiCA authorization and saw USDT pulled from regulated EU exchange order books when the framework's transition period closed on July 1.
Mobile Payments Shift European Banking Revenue and Data Access
Cash is losing ground to cards and apps across Europe. Mobile payments already exceed one in ten point-of-sale transactions in Ireland, the Netherlands and Finland. When customers pay through mobile platforms, banks absorb higher fees than debit cards carry and often receive no information about the transaction. This dual loss affects both revenue and the data that underpins lending decisions.
The infrastructure picture compounds the pressure. Two-thirds of card payments in the euro area now run on non-European schemes, and that share is climbing. Thirteen of the bloc's 21 countries lack a national card scheme. More than half have no domestic e-commerce solution, leaving Europe reliant on payment rails it does not control.
MiCA Framework Reshapes Stablecoin Market After July 1 Transition
The warning follows months of turbulence in Europe's stablecoin market. Tether skipped MiCA authorization and saw USDT pulled from regulated EU exchange order books after the framework's transition period closed on July 1. The rules require significant stablecoins to hold 60% of reserves in European bank deposits.
ECB President Christine Lagarde has questioned whether euro stablecoins carry financial-stability risks. She noted that EU rules already push at least 30% of issuer reserves into bank deposits. Cipollone stated that if stablecoin use increases in the future, banks will also lose retail deposits, placing deposit flight alongside the fees and transaction data that mobile platforms already siphon from lenders.
Digital Euro Design Limits Wallet Balances to Protect Bank Deposits
The digital euro would let a customer open a digital euro account at their bank and pay across the euro area in shops, online and person to person, with or without an internet connection. Holdings would carry no interest. Calibrated limits would cap wallet balances, giving users little reason to move large sums out of the banking system.
ECB analysis published last October found the project poses no risk to banks' liquidity or to financial stability. Cipollone has elsewhere called the digital euro a collective step for Europe built to prevent disintermediation. The ECB named 36 payment providers for a pilot launching in September 2027.
Qivalis Consortium Prepares MiCA-Compliant Euro Stablecoin for 2029
Private issuers are moving on the same terrain. A bank consortium named Qivalis grouping ING, UniCredit, BNP Paribas, CaixaBank and BBVA is readying a MiCA-compliant euro stablecoin backed one-to-one, with at least 40% of reserves in bank deposits.
The European Parliament backed its negotiating position last week with almost 70% of the vote. Trilogue talks opened on Monday. A first issuance could follow in 2029 if legislation clears by year-end.
FAQ
What did Piero Cipollone warn about stablecoins on Friday?
European Central Bank Executive Board member Piero Cipollone warned on Friday that wider stablecoin use would drain retail deposits from commercial banks. Speaking at the annual meeting of Italy's Federation of Cooperative Credit Banks in Rome, he positioned the digital euro as the safeguard that keeps lenders anchored in a fast-changing payments market.
How does the MiCA framework affect stablecoin reserve requirements?
The MiCA framework requires significant stablecoins to hold 60% of reserves in European bank deposits. After the transition period closed on July 1, Tether skipped MiCA authorization and saw USDT pulled from regulated EU exchange order books. EU rules already push at least 30% of issuer reserves into bank deposits.
When will the digital euro pilot launch?
The ECB named 36 payment providers for a pilot launching in September 2027. The digital euro would let customers open accounts at their banks and pay across the euro area in shops, online and person to person, with holdings carrying no interest and calibrated limits capping wallet balances.
