Summary
- Piero Cipollone, a member of the European Central Bank's executive board, stated that the digital euro will provide the highest level of privacy that modern technology can support, in an interview released on Monday.
- In offline transactions, only the payer and payee will have access to the payment details, while online transactions will be anonymous to the Eurosystem, although banks involved will retain identification capabilities.
- The European Parliament finalized its negotiating stance in July, with plans for a pilot program in the latter half of 2027 and the first issuance expected by 2029.
Piero Cipollone, an executive board member of the European Central Bank (ECB), asserted that the forthcoming digital euro will ensure users enjoy maximum privacy within the limits of current technology. This statement comes amid concerns that a central bank digital currency could enable excessive monitoring of consumer spending in Europe.
During an interview with the Italian media outlet ilsussidiario.net conducted on August 10 and published by the ECB on Monday, Cipollone addressed whether the bank would have the capacity to track individual payment behaviors. He clarified that offline payments would be conducted directly between users, with transaction details only accessible to the involved parties.
For online transactions, he explained that the Eurosystem would not be able to identify the parties involved; only the banks managing the transactions would have that capability, which is necessary for anti-money laundering compliance.
According to Cipollone, "The digital euro guarantees the maximum level of privacy that current technology can offer." However, while commercial banks would still see transaction details, they would maintain the identity and reporting responsibilities they currently hold. Privacy features are integrated, but these do not exempt the currency from existing financial regulations, as noted by an ECB spokesperson in December.
The European Parliament reached a consensus on its regulatory position in July, aiming for negotiations with member states to conclude by the end of 2026. The ECB has selected 36 payment providers, including major players like Deutsche Bank, UniCredit, and Revolut, to participate in a year-long pilot starting in the second half of 2027, with the official launch aimed for 2029.
CBDCs in the EU and the US
In contrast, U.S. lawmakers have taken a different stance on privacy concerns, enacting legislation in July that prohibits the Federal Reserve from launching a central bank digital currency until 2030, after which it would require explicit congressional approval. The Senate passed the 21st Century ROAD to Housing Act with an 85-5 vote in June, and it became law on July 11 without the signature of President Donald Trump.
This law excludes open, permissionless, and private dollar-denominated currencies, leaving stablecoin issuers governed by last year's GENIUS Act unaffected.
Cipollone has suggested that this approach could impose costs on Europe. In July, he warned that increasing reliance on stablecoins might deplete retail deposits in European banks, compounding the losses already incurred from fees and transaction data being siphoned off to mobile payment services.