European Central Bank Executive Board member Piero Cipollone said that wider stablecoin adoption could erode bank deposits during a gathering of Italian cooperative bankers.
This shift threatens the stability of the traditional financial system by siphoning retail funds away from commercial banks. If deposits continue to migrate toward private digital assets, banks may lose their primary source of funding and their central role in processing payments.
Cipollone spoke in Italy on July 17, 2026 [2], addressing the risks posed by the growth of stablecoins. He said that the expansion of these assets could drain retail deposits from banks, which would undermine the existing payments infrastructure.
To counter this trend, Cipollone said that the development of a digital euro is essential. He said the digital euro would ensure that banks remain at the center of the payments ecosystem, rather than being sidelined by private competitors.
The scale of the potential disruption is significant. Reports indicate that stablecoins pose a threat to roughly 300 million bank accounts [1]. This vulnerability stems from the ease with which users can move traditional currency into digital stablecoins, effectively removing liquidity from the banking sector.
By promoting a central bank digital currency, the ECB aims to provide a public alternative that offers the efficiency of digital assets without the systemic risks associated with private stablecoin issuers. Cipollone's comments highlight the ongoing tension between decentralized finance and the regulated banking frameworks of the eurozone.
“Stablecoins pose a threat to roughly 300 million bank accounts”
The ECB is positioning the digital euro not just as a technological upgrade, but as a defensive measure to protect the monetary transmission mechanism. If retail deposits migrate to stablecoins, commercial banks lose the low-cost funding necessary for lending, potentially slowing economic growth and increasing the influence of private entities over public monetary policy.
