The European Central Bank (ECB) is once again trying to address key concerns surrounding the digital euro, emphasizing privacy as the main advantage of the new CBDC. Piero Cipollone, a member of the regulator's executive board, stressed that the level of confidentiality for digital currency transactions will be significantly higher than in traditional bank transfers. According to him, the Eurosystem will technically be unable to directly match a specific user with their transactions.
Offline and Online: Different Levels of Protection
A key element of the concept is offline payments, which are expected to occur directly between participants, bypassing intermediaries. In this scenario, transaction data remains known only to the payer and the recipient, effectively mimicking the anonymity of cash. In online mode, user identification remains the prerogative of participating banks, which are required to comply with anti-money laundering (AML) standards. Thus, the ECB is trying to strike a balance between privacy and regulatory requirements.
Cipollone also categorically rejected the claim that the digital euro could displace cash. He insists that the CBDC is being created as a complement, not a replacement, for fiat currency, especially in segments where cash is inefficient—such as online commerce. As an argument, he cited the results of ECB public surveys on the design of new banknotes, which, in his view, demonstrate sustained demand for physical money.
Criticism and Implementation Prospects
However, not everyone shares the regulator's optimism. The Austrian digital rights group Epicenter.works and a number of other organizations have already subjected the project to harsh criticism. Their main argument: the privacy guarantees in the current version rely on institutional promises rather than technical mechanisms, making them vulnerable to changes in political or legal conditions.
The process is moving forward, but slowly. After the European Parliament approved its position on the Single Currency Package in July, negotiations began with the EU Council and the European Commission. The ECB expects to adopt the final regulation by the end of 2026, and aims to be ready for a potential first CBDC issuance by 2029. At the same time, the decision to launch will only be made after the full approval of the legislative framework. It is worth recalling that the regulator has already selected 36 banks and payment companies for the closed pilot of the digital euro.
My analysis: The ECB's statements are an attempt to reassure the public, but the key question remains open: whether the technical architecture can deliver the stated level of privacy without creating "black holes" for financial monitoring. I believe that the actual privacy parameters will only become clear after the publication of the technical specification, and the current promises are more of a political move to accelerate the legislative process.