European Central Bank board member Piero Cipollone has warned that stablecoin adoption could erode bank deposits, posing a structural threat to the traditional banking system. Speaking on the three-layer threat banks face from digital payments, Cipollone argued that the digital euro represents the only structural answer to preserve banks’ central role in payments.
Cipollone outlined how stablecoins could disintermediate banks by attracting deposits away from traditional accounts into digital wallets. This would reduce banks’ funding base and potentially constrain their lending capacity. He noted that stablecoin growth, combined with the rise of big tech payment platforms, creates a challenging environment for traditional lenders.
The digital euro, which the ECB has been developing since 2021, would keep banks at the center of the payment system by providing a central bank digital currency distributed through existing banking infrastructure. The ECB has targeted a potential launch by 2029, though legislative approval is still required from EU institutions.
Cipollone’s remarks reflect growing concern among central bankers about the pace of stablecoin adoption. With USDT and USDC collectively representing over $150 billion in circulation and platforms like Visa integrating stablecoin payments, the threat to traditional banking is becoming more tangible. As reported by Cointelegraph and Decrypt, the ECB sees the digital euro as essential for maintaining monetary sovereignty.
