European Central Bank officials maintain that the Eurosystem will not be able to identify individual users through their digital euro payments, although privacy advocates remain doubtful about how those protections would work in practice.
The European Central Bank (ECB) is attempting to ease concerns that its proposed digital euro could become a tool for financial surveillance. ECB Executive Board member Piero Cipollone said the digital currency would be built with privacy protections that could exceed those available with conventional bank transfers.
Cipollone said the Eurosystem would be structurally unable to connect a specific person with their digital euro transactions, regardless of whether payments were made online or offline.
He noted that traditional bank transfers allow participating parties to access transaction details. By contrast, Cipollone said the digital euro is being designed to provide the strongest privacy level currently possible with available technology.
The comments come amid growing public resistance to CBDCs. Critics have raised concerns that digital currencies issued by central banks could give governments greater insight into personal spending and potentially create mechanisms for controlling how individuals use their money.
Civil Groups Question Digital Euro Privacy
Epicenter.works, an Austrian digital rights organization, and other civil society groups have challenged the ECB’s privacy assurances.
In a joint statement earlier this month, the groups argued that the proposed protections rely too much on institutional promises instead of technical safeguards that would prevent misuse. They warned that privacy commitments written into legislation could be weakened during implementation, interpreted differently by courts or potentially not enforced.
Cipollone provided further details about the privacy model, particularly for offline transactions. He said offline digital euro payments would be conducted directly between the sender and recipient, with transaction information available only to those parties. The arrangement would therefore function similarly to a cash transaction.
For online payments, banks would retain the ability to identify customers, but Cipollone said that access would be restricted to purposes such as anti-money-laundering compliance.
The ECB official also rejected speculation that the digital euro is intended to eliminate physical cash. He cited the central bank’s recently launched consultation on future euro banknotes as evidence that cash will remain part of the monetary system.
According to Cipollone, designing new banknotes would be unnecessary if the ECB planned to phase out cash.
His remarks come after the European Parliament approved legislation for the digital euro last month. The project is currently scheduled for rollout in 2029.
ECB President Christine Lagarde has also said that the digital euro and physical cash are expected to coexist rather than one replacing the other.
