Cipollone: Stablecoins Are Coming for Banks' Lunch Money 🍽️

European Central Bank Executive Board member Piero Cipollone warned Friday that broader stablecoin adoption could shrink commercial banks' retail deposit base, framing digital payments as an accelerating threat to Europe's traditional banking model. Speaking at Italy's Federation of Cooperative Credit Banks in Rome, Cipollone said banks are already ceding payment fees and transaction data to mobile payment providers, a shift he tied to Europe's growing reliance on non-European payment infrastructure.

Cipollone positioned the digital euro as the ECB's prescribed remedy. "The digital euro would both preserve the role of public money and ensure banks remain involved in the payments ecosystem while continuing to meet their customers' needs," he said. He argued that a central bank-issued digital currency would keep public money central to retail payments while keeping banks in the distribution loop rather than sidelining them.

The ECB on Tuesday selected 36 payment service providers — including banks, fintechs and payment companies — for a 12-month digital euro pilot scheduled to begin in the second half of 2027. The exercise is designed to test how a retail central bank digital currency could function across the euro area ahead of any issuance decision, which the ECB has said could arrive as early as 2029.

Cipollone's remarks landed the same week European Securities and Markets Authority regulators moved on the broader crypto oversight track, adding 14 new crypto-asset service providers to the Markets in Crypto-Assets register as licensing momentum across the bloc continues to cool. The pilot roster and the MiCA registration activity together underscore how European authorities are simultaneously building out regulated digital payment rails and tightening the perimeter around private digital asset providers as stablecoins draw closer to mainstream use.