The European Central Bank (ECB) is making important statements regarding the privacy of the future state digital currency. Piero Cipollone, a member of the regulator's executive board, confirmed that the digital euro will provide a higher level of privacy compared to traditional bank transfers. The key point is that the Eurosystem will technically be unable to directly match users with their transactions.
Offline mode as the main trump card
In my analysis, I highlight the offline scenario as the most revolutionary aspect. According to Cipollone, such payments will be processed directly between participants, without any intermediaries. Transaction details will remain known exclusively to the payer and the recipient—this creates a level of anonymity comparable to cash, but in digital form.
In online mode, the situation is different. Here, user identification will be handled by participating commercial banks. This is primarily necessary to comply with anti-money laundering (AML) requirements. Thus, we see a two-tier model: maximum confidentiality offline and regulated transparency online.
Cash will not disappear
Cipollone also dispelled concerns about the displacement of physical money. The digital euro is designed not as a replacement, but as a complement—a tool for scenarios where cash does not work, such as e-commerce. As evidence, he cites the ECB's public survey on the redesign of euro banknotes, which underscores the regulator's long-term commitment to preserving cash.
However, project critics, including the Austrian group Epicenter.works, rightly point out a weak spot: privacy guarantees are based on institutional promises rather than immutable technical mechanisms. This is a serious argument that requires attention.
Timeline and prospects
The process is moving according to plan: the European Parliament has already approved its position on the Single Currency Package in July, and negotiations with the EU Council and the European Commission are now underway. The ECB expects the regulation to be adopted by the end of 2026, with a potential first CBDC issuance possible in 2029. At the same time, the final decision on launch will be made only after the legislative framework is approved. 36 banks and payment companies are already participating in the pilot phase.
My view: the ECB's statements are an attempt to strike a balance between privacy and regulation, but it is the technical implementation of offline mode that will be the determining factor for trust. If privacy promises turn out to be marketing rather than architecture, the digital euro risks repeating the fate of many unpopular government initiatives.