ECB Defends Digital Euro Privacy Design, Says Eurosystem Cannot Identify Users

The European Central Bank is defending the privacy design of its planned digital euro, with ECB Executive Board member Piero Cipollone saying the Eurosystem would not be able to identify users making or receiving payments. In an interview published Monday and dated Aug. 10, Cipollone said the digital euro would limit the amount of transaction data visible to the central bank. He added that only the banks involved in a transaction would be able to identify users, including for anti-money laundering purposes. The Eurosystem, he said, would not be able to directly link specific people to digital euro payments. For offline transactions, Cipollone said payment details would be available only to the payer and payee. The ECB’s privacy defense comes as lawmakers, privacy advocates and members of the crypto community continue to warn that government-issued digital currencies could expand financial surveillance. In the United States, President Donald Trump in January 2025 prohibited federal agencies from developing or promoting a central bank digital currency, citing risks to financial stability, individual privacy and US sovereignty. House lawmakers have also advanced the Anti-CBDC Surveillance State Act, which seeks to bar the Federal Reserve from issuing a CBDC. The ECB has also framed the digital euro as a tool for payment sovereignty. In an April public lecture in Latvia, Cipollone said Europe’s dependence on non-European payment providers creates a strategic vulnerability. He said two-thirds of euro-area card transactions are governed by non-European companies, and that a digital euro could reduce that dependence while giving Europe a payment infrastructure it controls. The European Parliament’s Economic and Monetary Affairs Committee backed its position on the digital euro legislation in June. Lawmakers then cleared the proposal for negotiations with the Council in July. The ECB has said a digital euro could be issued as early as 2029, if the necessary legislation is adopted and the project clears its remaining technical and operational stages.