ECB Official Warns Stablecoins Could Erode Bank Deposits, Advocates Digital Euro

Piero Cipollone, an Executive Board member of the European Central Bank, stated that the growing popularity of stablecoins poses a risk of retail deposit outflows from European commercial banks, potentially impacting their lending capacity. He highlighted the digital euro as a long-term solution, designed with non-interest-bearing holding limits to mitigate large-scale capital outflows. The ECB's digital euro pilot is set for late 2027, with legislative negotiations aiming for agreement by end-2026 and an official launch no earlier than 2029.