Digital Euro: The ECB responds to surveillance fears

The digital euro would offer more confidentiality than a traditional bank transfer. In any case, this is what the European Central Bank assures, through the voice of Piero Cipollone, member of its board, who affirms that the Eurosystem will remain incapable of linking a citizen to their payments. A promise that defenders of digital freedoms welcome with suspicion.

The Eurosystem will not be able to connect citizens to their payments

The digital euro is the central bank digital currency (CBDC) of the eurozone, an electronic form of public money issued by the ECB to complement banknotes and coins. The project, the functioning of which we have detailed, is based on an architecture which, according to Frankfurt, prevents the Eurosystem from linking an individual to a transaction.

In a interview published by the ECB On August 10 with the Italian media Ilsussidiario.net, Piero Cipollone compared the digital euro to the classic bank transfer.

Currently, in the case of a bank transfer, all transaction data is known to the parties involved. The digital euro would guarantee better protection of privacy. The digital euro guarantees the maximum level of privacy that current technology can offer.

Two regimes coexist. Offline, payments pass directly from one device to another, without going through a central infrastructure: only the sender and recipient know the details of the exchange.

Online, commercial banks remain intermediaries and can identify their customers to comply with anti-money laundering rules, but the Eurosystem would only receive pseudonymized data, with no direct link to a person.

CoinDeskwhich reported these statements on Tuesday, presents them as the ECB’s strongest response to accusations of surveillance. Christine Lagarde continues to repeat that the digital euro and cash will coexist.

Civil society wants technical guarantees, not promises

However, Frankfurt’s assurances are not enough to convince everyone. In June, the Austrian organization Epicenter.works and several civil society actors had already called on European legislators to strengthen the confidentiality guarantees of the project. Their concern relates in particular to the risk of depending on institutional guarantees which could evolve over time.

This distrust goes far beyond European borders. In the United States, Congress prohibited the Federal Reserve from issuing a digital dollar until the end of 2030, a law passed in the Senate by 85 votes to 5 and entered into force on July 11.

This context pushes the ECB to increase the number of details: it has already detailed the role of banks and fintechs, and Cipollone warned in July that the growth of stablecoins threatened European bank deposits.

A tight schedule between negotiations and pilot project

The text has not yet been adopted. MEPs validated their negotiating position on July 9, which opens discussions with the Council, with an agreement hoped for by the end of 2026. Each step can further modify the balance between private life and the fight against fraud.

Deutsche Bank, UniCredit and Revolut are among 36 providers selected by the ECB for a twelve-month pilot planned for the second half of 2027, which will test online and offline payments as well as user experience. A first issuance remains targeted for 2029, subject to legislation, the results of the pilot and a decision by the Board of Governors.

The green light given by MEPs has not closed anything: it is the negotiations in the fall, then the pilot phase in 2027, which will tell whether the digital euro really offers more confidentiality than a bank transfer, or whether the gap boils down, ultimately, to a simple communication argument.