Crypto▼ Bearish
ECB Joins US Banks in Warning Stablecoins Could Drain Deposits
ECB board member Piero Cipollone warned that stablecoin adoption would drain retail deposits from banks, echoing U.S. concerns. The ECB plans a digital euro pilot in 2027.
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Piero Cipollone, an ECB Executive Board member, told a banking conference in Rome that rising stablecoin use would pull deposits from traditional lenders. “If the use of stablecoins increases in the future, banks will also lose retail deposits,” he said, per a Decrypt report. Banks rely on customer deposits as a cheap, stable funding source for loans. A shift into privately issued tokens could raise their cost of lending or shrink the pool of available credit.
The warning landed hardest for small institutions. Cipollone spoke to executives from Italy’s cooperative banking sector. Roughly half of those banks’ branches operate in towns with fewer than 10,000 residents, the report said. They depend on local relationships, deposit data and transaction revenue to support their lending books. Stablecoins, which now form a roughly $300 billion market mostly in U.S. dollars, let users hold value outside conventional accounts without relying on the banking infrastructure that payment apps still use.