Key facts
- ECB executive board member Piero Cipollone stated the digital euro will offer the maximum level of privacy current technology allows.
- Offline digital euro payments would be visible only to the payer and payee.
- Online digital euro transactions would not be identifiable by the Eurosystem, but could be by involved banks for AML purposes.
- The European Parliament has agreed its negotiating position on the digital euro regulation.
- A pilot program for the digital euro is set to begin in the second half of 2027.
- The first issuance of the digital euro is targeted for 2029.
Piero Cipollone, an executive board member of the European Central Bank (ECB), has asserted that the forthcoming digital euro will provide the highest degree of privacy achievable with current technology. In an interview published Monday, Cipollone addressed concerns that a central bank digital currency could enable surveillance of citizens' spending habits.
He explained that offline digital euro payments would be conducted directly between individuals, with transaction details visible only to the payer and payee. For online transactions, Cipollone stated that the Eurosystem itself would not be able to identify the parties involved. However, he noted that commercial banks facilitating these transactions would still have access to the information, enabling them to fulfill existing obligations such as anti-money laundering (AML) checks.
Cipollone emphasized, "The digital euro guarantees the maximum level of privacy that current technology can offer." He also clarified that while privacy features are integrated, they do not exempt the digital currency from existing financial regulations. Commercial banks distributing the digital euro would retain their current identity verification and reporting responsibilities.
The European Parliament has established its negotiating stance on the digital euro's regulatory framework, with discussions involving member states aiming for an agreement by the end of 2026. The ECB has identified 36 payment providers, including major institutions like Deutsche Bank, UniCredit, and Revolut, to participate in a 12-month pilot program commencing in the latter half of 2027. The initial issuance of the digital euro is projected for 2029.
In contrast, the United States has taken a different approach. The 21st Century ROAD to Housing Act, signed into law on July 11, prohibits the Federal Reserve from issuing a central bank digital currency until 2030, requiring explicit congressional authorization thereafter. This ban specifically excludes dollar-denominated currency that is open, permissionless, and private, leaving existing stablecoin issuers regulated under the GENIUS Act unaffected.
Cipollone has previously voiced concerns about the potential consequences for European banks if they do not develop their own digital currency. He warned in July that the increasing use of stablecoins could lead to a significant loss of retail deposits and transaction data for European banks, further exacerbated by the existing shift of data to mobile payment platforms.