European Central Bank officials say the Eurosystem will be designed so it cannot directly associate individual users with their digital euro transactions, but civil liberties groups continue to question whether those privacy protections will hold in practice.
The European Central Bank (ECB) is responding to growing concerns that its planned digital euro could increase financial surveillance. ECB Executive Board member Piero Cipollone said the digital currency is intended to provide stronger privacy safeguards than traditional bank transfers.
In a recent interview, Cipollone said the Eurosystem would be technically incapable of connecting a particular person with their digital euro payments, whether the transactions occur online or offline.
He contrasted the system with conventional bank transfers, where transaction information is available to the parties involved. According to Cipollone, the digital euro would provide the highest degree of privacy that currently available technology can deliver.
The assurances come as criticism of the digital euro has increased. CBDCs in general have faced opposition from people concerned that governments could gain greater visibility into citizens’ spending and potentially influence or restrict how money is used.
Digital Euro Privacy Guarantees Draw Doubts
Austrian digital rights organization Epicenter.works and other civil society groups have challenged the ECB’s claims about privacy.
In a joint statement released earlier this month, the organizations said the proposed safeguards depend too heavily on institutional commitments rather than technical protections built into the system. They warned that legal guarantees could be weakened during implementation, subject to different interpretations in court or fail to be enforced.
Cipollone also outlined how privacy would work for offline transactions. He said offline digital euro payments would take place directly between the payer and recipient, with transaction details visible only to those two parties. He compared the arrangement to a cash payment.
For online transactions, banks would be able to identify customers, but Cipollone said that information would be available only for purposes such as complying with anti-money-laundering requirements.
He also dismissed concerns that the digital euro could eventually replace physical cash. Cipollone pointed to the ECB’s recent consultation on new euro banknotes as evidence that the central bank intends to keep cash available.
He argued that developing a new generation of banknotes would not make sense if the ECB were preparing to eliminate physical currency.
The remarks follow the European Parliament’s approval of digital euro legislation last month. The project is currently expected to launch in 2029.
ECB President Christine Lagarde has similarly stressed that the digital euro is not intended to eliminate cash, saying digital payments and physical currency are expected to exist alongside each other.
