ECB Official Warns Stablecoins Could Drain Bank Deposits, Pushes Digital Euro
ECB board member Piero Cipollone outlines three threats from digital payments and proposes the digital euro as a remedy.
European Central Bank (ECB) board member Piero Cipollone warned that stablecoins and other digital payment methods could threaten the traditional banking system by draining bank deposits. Speaking at a recent event, Cipollone laid out a three-layer threat that banks face from the rise of digital payments.
The first threat involves competition from stablecoins and other private digital assets that could lure deposits away from banks. The second concerns the potential for disintermediation, where payment services bypass banks entirely. The third threat relates to the loss of central bank money's role as an anchor for the financial system.
Digital Euro as a Solution
Cipollone argued that the only structural answer to these threats is the introduction of a digital euro, a central bank digital currency (CBDC) being developed by the ECB. He emphasized that a digital euro would preserve the role of central bank money in the digital age and ensure that Europeans have access to a secure, public payment option.
The ECB has been actively researching and developing the digital euro project, with a potential launch in the coming years. The remarks come amid growing global interest in CBDCs as a response to the rise of private cryptocurrencies and stablecoins.