European Central Bank officials say the planned digital euro will be designed to prevent the Eurosystem from connecting users with individual transactions, though privacy groups continue to question whether those safeguards will be strong enough.

The European Central Bank (ECB) is seeking to counter concerns that the digital euro could increase government surveillance of financial activity. ECB Executive Board member Piero Cipollone said the proposed currency could offer greater privacy than existing bank-transfer systems.

In a recent interview, Cipollone said the Eurosystem would be structurally incapable of linking a specific individual to their digital euro payments, whether the transactions are conducted online or offline.

He said conventional bank transfers expose transaction details to the parties involved, while the digital euro is intended to provide the highest privacy standard achievable with current technology.

The reassurances come as opposition to central bank digital currencies continues to grow. Critics fear CBDCs could give authorities greater visibility into citizens’ spending habits and potentially allow governments to influence how digital money is used.

Privacy Safeguards Remain Under Debate

Austrian digital rights group Epicenter.works and other civil society organizations have challenged the ECB’s claims.

In a joint statement released earlier this month, the groups argued that the digital euro’s privacy protections depend too heavily on institutional assurances rather than technical safeguards. They warned that protections established through legislation could be weakened during implementation, subject to judicial reinterpretation or fail to be enforced.

Cipollone said offline payments would provide the strongest level of privacy. According to him, such transactions would take place directly between the payer and recipient, with payment details accessible only to those parties, similar to the privacy of cash.

Online transactions would work differently. Banks would be able to identify their customers, but Cipollone said that information would be used only for purposes such as meeting anti-money-laundering requirements.

He also rejected the idea that the digital euro would eventually replace physical currency. Cipollone pointed to the ECB’s consultation on designing new euro banknotes as evidence that cash will continue to be supported.

He argued that there would be little reason to develop new banknotes if the central bank intended to eliminate cash.

The comments follow the European Parliament’s approval of digital euro legislation last month, with the project currently scheduled for a 2029 rollout.

ECB President Christine Lagarde has likewise emphasized that the digital euro is intended to exist alongside physical cash rather than replace it.