Woofun AI reports that European Central Bank Executive Board member Piero Cipollone warned that the expansion of stablecoins could trigger retail deposit outflows from European commercial banks, undermining their primary funding source and lending capacity. Cipollone noted that while mobile payments have already eroded fee income, the $300 billion global stablecoin market, predominantly US dollar-pegged, poses a distinct threat to deposit stability.

To mitigate this risk, the ECB is advancing the digital euro project, designed with non-interest-bearing features and holding limits to prevent large-scale capital flight. Commercial banks will manage accounts, and 36 payment service providers have been selected for a 12-month pilot launching in the second half of 2027. Following the European Parliament's approval of legislative negotiations in early July, the goal is to finalize the bill by late 2026, with official issuance targeted for 2029.