Stablecoins pose a particular risk to banking businesses, it is alleged in Europe.
The digital euro is presented as a tool that allows banks to compete.
In an article published this Friday on the blog of the European Central Bank (ECB), directors Piero Cipollone (member of the Executive Board) and Frank Elderson (vice president of the Supervisory Board) point out that stablecoins represent a growing challenge for traditional banking in Europe.
The text, titled “Digital euro: an opportunity for banks”, underlines that the digitalization of payments is also driven by non-banking actors, and explicitly mentions stablecoins as one of the threats.
“With stablecoins, you could lose fees, data, and stable retail deposits,” the authors state directly. According to the analysis, the Banks already transfer commission income through international schemes of cards and lose data and, in some cases, even incur losses with mobile payment solutions from big technology.
Stablecoins would exacerbate this trend. By not relying on traditional banking infrastructure, they could capture some of the retail business and reduce the deposit base that serves as a stable source of financing for loans. Faced with this scenario, Cipollone and Elderson defend the digital euro as a strategic opportunity.
Compared to the risk of losing business, data and deposits to stablecoins, the digital euro allows banks to offer payment services that meet the changing needs of their customers in the digital age and ensures that banks receive fair compensation, pay fewer fees and maintain retail deposits as an important source of funding.
Cipollone and Elderson, directors of the ECB.
The article presents the digital euro not as a competitor to banks, but as a common European infrastructure that would allow them to innovate and compete on a continental scale with non-banks and stablecoins.
In this way, the ECB seeks to strengthen Europe’s autonomy in payments and preserve financial resilience. The digital euro project has been in the preparation phase since 2023, after a research phase that began in 2021.
Although the article does not go into technical details or specific deadlines, it reiterates that the objective is to bring central bank money into the digital age without altering the central role of commercial banking.
In a context of global competition and advances in alternative payment methods, the ECB’s position underlines that the digital euro could become a key instrument to maintain the stability of the European financial system in the face of the advance of stablecoins, as reported by CriptoNoticias.
The authors conclude that this initiative is “critically important for European strategic autonomy and resilience.”
The new euro in development is one of the central bank digital currencies (CBDC) with the greatest momentum currently, along with China’s digital yuan. The above is a contrast, for example, with the policy of the United States, a country that prohibited the issuance of any currency of this type, arguing control and surveillance risks on people.