ECB defends digital euro privacy, says banks hold ID data

In an interview published Aug. 10, Piero Cipollone, an ECB Executive Board member, defended the digital euro’s privacy design, stating the Eurosystem would not be able to identify users making or receiving payments and that identifying information would be held by banks involved in transactions.

Cipollone told the interview that offline digital euro transfers would keep payment details available only to the payer and the payee. He said anti-money-laundering checks and other identification duties would remain the responsibility of regulated banks and payment providers, not the central bank.

The ECB has framed the digital euro as a way to strengthen Europe’s payments infrastructure and reduce dependence on non-European payment firms. In an April lecture in Latvia, Cipollone noted that about two-thirds of euro-area card transactions are processed by companies based outside Europe.

The project advanced through legislative and technical steps this year. The European Parliament’s Economic and Monetary Affairs Committee adopted a position on digital euro rules in June, and lawmakers cleared the proposal to start negotiations with the Council in July. The ECB selected 36 payment providers to take part in system tests ahead of a pilot phase planned for 2027.

The bank has said a digital euro could be issued as early as 2029 if lawmakers approve the required legislation and the project completes remaining technical and operational work. The ECB has said final technical specifications will reflect policy choices on privacy, usability and security, and that legal approval is required before issuance.

Not all stakeholders accept the ECB’s privacy assurances. Lawmakers, privacy campaigners and members of the crypto community have warned that a central bank digital currency could expand state monitoring of financial activity. In the United States, federal action in January 2025 barred agencies from developing or promoting a CBDC and the House advanced legislation called the Anti-CBDC Surveillance State Act to prevent the Federal Reserve from issuing a CBDC.

Cipollone reiterated that the system’s architecture aims to limit the transaction-level data accessible to the central bank while allowing intermediaries to perform required compliance checks.