The ECB said on March 27 that banks risk losing payment market share to stablecoins and urged the launch of a digital euro to preserve their role in the payments system.
The European Central Bank has set a mid-2026 deadline to finalise EU-wide standards for the digital euro, giving financial service providers time to adapt systems ahead of any issuance decision.
The ECB has begun work to map how a digital euro would operate on existing ATMs and payment terminals, with a focus on enabling offline transactions and ensuring interoperability.
UniCredit CEO Andrea Orcel said a digital euro could erode banks' liquidity and profit margins by diverting retail deposits, while describing the initiative as "relatively constructive."
The European Central Bank unveiled Appia, a strategic framework to develop tokenized wholesale financial markets across Europe and prioritise settlement in central bank money.
The European Central Bank cautioned that rising stablecoin use may shift deposits away from banks, weakening banks’ lending capacity and the transmission of monetary policy across the euro area.
A senior European Central Bank policymaker warned that implementing a digital euro could shave €4–6 billion off European banks’ revenues over a four-year rollout. The estimate underscores potential disruption to bank business models as policymakers design the retail CBDC.
Reports that ECB President Christine Lagarde is considering an early exit arrive as the EU advances key decisions on the digital euro. The potential leadership change raises questions about continuity in design, timing and regulatory stance.
ECB policymaker Cipollone said the digital euro will be structured to protect European card networks and keep banks central to the euro-area payments system, aiming to preserve incumbent infrastructure and stability.
The ECB will accept certain DLT-issued securities as eligible collateral in Eurosystem credit operations from March 30, and Ripple has been granted a full EU license — a sign of growing regulatory acceptance for tokenized finance.