The European Central Bank has warned that the spread of stablecoins could eat into European banks’ retail deposits and has put forward a digital euro as a response. Executive Board member Piero Cipollone said banks that have already lost fees and transaction data to mobile payments could see their deposit base shaken. The ECB said falling deposits could weaken lending capacity and is moving ahead with a digital euro pilot planned for 2027.

Six major Swiss banks are testing a stablecoin pegged to the Swiss franc with Swiss Stablecoin AG, CoinDesk reported. UBS, PostFinance, Sygnum, Raiffeisen, Zurich Cantonal Bank and BCV set up a sandbox allowing banks and institutions to trial real transactions in a controlled environment through 2026. The project limits user numbers and volumes to manage risk and focuses on payment process testing and programmable money. Switzerland does not yet have a widely used regulated CHF stablecoin.