The digital euro would give users as much privacy as current technology allows, European Central Bank executive board member Piero Cipollone has said, in the institution's sharpest answer yet to the charge that a central bank digital currency would let Frankfurt watch how Europeans spend.

Cipollone made the claim in an interview with Italian outlet ilsussidiario.net, conducted on August 10 and published by the ECB on Monday, in which he was asked directly whether the bank could monitor payment habits and track how each citizen uses the currency. Offline payments, he said, would run directly between individuals, with the transaction details available only to the payer and the payee.

For payments made online, he said, the Eurosystem — the ECB together with the euro area's national central banks — would not be able to identify the people making or receiving payments. Only the banks involved in a transaction could do so, including for anti-money laundering purposes.

"The digital euro guarantees the maximum level of privacy that current technology can offer," Cipollone said.

Payments would still be visible to the commercial banks distributing the currency, which would keep the identity and reporting obligations they carry today. Privacy features are built in, but they do not exempt the currency from the rules applying to all money, an ECB spokesperson told Decrypt in December.

The privacy question has followed the project from the outset: in the ECB's public consultation on a digital euro, respondents ranked privacy of payments as the most important feature of a future digital currency, and it has stayed at the centre of the debate as the project has moved toward launch.

Legislative timeline

The ECB began studying the currency in 2021 with a two-year investigation phase, then moved into a preparation phase in November 2023 to draft the scheme's rulebook and select the firms that would test it. The European Parliament agreed its negotiating position on the regulation in July, and talks with member states are targeting a deal by the end of 2026. The ECB has named 36 payment providers, among them Deutsche Bank, UniCredit and Revolut, for a 12-month pilot starting in the second half of 2027, with first issuance targeted for 2029.

The design also provides for per-person holding limits, intended to keep the digital euro a payment instrument rather than a savings account and to cap how much money can move out of commercial bank deposits; the level is among the details still to be settled before launch.

The EU, the US and CBDCs

Washington has reached the opposite conclusion on the same privacy question, and in July wrote it into law. The 21st Century ROAD to Housing Act bars the Federal Reserve from issuing a central bank digital currency until the end of 2030, after which it would need explicit authorization from Congress. The Senate passed the bill 85-5 in June, and it became law on July 11 without President Donald Trump's signature.

The ban exempts dollar-denominated currency that is open, permissionless and private, leaving the stablecoin issuers regulated under last year's GENIUS Act untouched.

Cipollone has argued that the American route carries a cost for Europe. In July, he warned that growing stablecoin use would strip European banks of retail deposits, on top of the fees and transaction data they are already losing to mobile payment platforms. The ECB has pitched the digital euro on similar grounds: a public European payment option as reliance grows on US card networks and wallets run by foreign technology platforms.