The European Central Bank (ECB) is defending the privacy of its planned central bank digital currency (CBDC).
In an interview from August 10th, published on Monday, ECB Executive Board member Piero Cipollone stated that the digital euro will limit the amount of transaction information available to the central bank.
"The Eurosystem will not be able to identify users sending or receiving payments," Cipollone said.
According to Cipollone, only the banks involved in transactions will be able to identify users, including for anti-money laundering purposes. The Eurosystem will not be able to directly link specific individuals to digital euro payments. For offline transactions, payment details will only be available to the payer and the payee.
Despite the ECB's attempts to allay concerns about the privacy of the planned digital euro, lawmakers, privacy advocates, and representatives of the crypto community have warned that government-issued digital currencies could enhance financial surveillance.
In the US, President Donald Trump banned federal agencies from developing or promoting CBDCs in January 2025, citing risks to financial stability, citizen privacy, and US sovereignty. House lawmakers separately advanced the CBDC Surveillance State Prohibition Act, which would prohibit the Federal Reserve from issuing a CBDC.
Related: ECB Selects 36 Payment Service Providers to Test Digital Euro Ahead of 2027 Pilot Launch
Digital Euro Presented as a Tool for Payment Sovereignty
Beyond privacy, the ECB has presented the digital euro as part of Europe's efforts to strengthen its payment infrastructure and reduce dependence on non-European payment service providers.
In a public lecture in Latvia in April, Cipollone stated that Europe's reliance on non-European payment service providers creates a strategic vulnerability. He noted that two-thirds of card transactions in the eurozone are controlled by non-European companies, and the digital euro could reduce this dependence and provide Europe with a payment infrastructure under its own control.
The European Parliament's Committee on Economic and Monetary Affairs confirmed its position on digital euro legislation in June, and lawmakers later approved a proposal to begin negotiations with the Council in July.
The ECB stated that the digital euro could become available as early as 2029, provided the necessary legislation is adopted and the remaining technical and operational phases of the project are successfully completed.
Magazine: Digital Euro: Surveillance Money or the Best Replacement for Cash?
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