The European Central Bank has issued its strongest privacy defense of the digital euro to date, with Executive Board member Piero Cipollone stating that the Eurosystem would be unable to connect individual users with specific payments. In an interview published August 24 and highlighted by the ECB on August 26, Cipollone argued that “the digital euro guarantees the maximum level of privacy that current technology can offer.”
According to the proposed design, offline digital euro payments would operate directly between devices and would reveal personal transaction details only to the payer and payee. Online transactions would still be processed through banks and payment service providers, which could identify customers during anti-money laundering checks. However, the Eurosystem would receive only pseudonymized settlement information and would not directly link that data to a particular person. The ECB says the system would run on a centralized settlement platform rather than a public blockchain. Offline payments would resemble cash, with anti-money laundering controls applied when users fund or withdraw from offline wallets, and Cipollone reiterated that physical cash would not be replaced.
The European Parliament did not grant final approval to the digital euro regulation in July; instead, members authorized negotiations with the Council after adopting a negotiating position on July 9. The Council had already adopted its position in December 2025. Both institutions must agree on a common text before a final approval vote. The ECB is planning a 12-month pilot in the second half of 2027, involving 36 payment providers including Deutsche Bank, UniCredit and Revolut, and says a first issuance could occur in 2029 if legislation is adopted by the end of 2026 and the Governing Council later approves issuance.
Digital rights organizations such as epicenter.works remain unconvinced, warning that privacy protections “rely too heavily on institutional assurances” rather than independently verifiable technical controls. They have called for zero-knowledge proofs, threshold cryptography, authenticated encryption and open-source code where possible. The privacy debate also contrasts with the United States, where the 21st Century ROAD to Housing Act bars the Federal Reserve from issuing a CBDC until the end of 2030, while Cipollone has separately warned that growing stablecoin use could strip European banks of retail deposits and transaction data.
