ECB Defends Digital Euro Privacy Amid Growing Surveillance Concerns

The European Central Bank (ECB) has defended its digital euro project against growing concerns about financial surveillance. The bank claims that only banks involved in a transaction would be able to identify the parties, while the Eurosystem itself cannot link payments to specific individuals. According to Piero Cipollone, a member of the ECB's Executive Board, offline digital euro transactions would be visible only to the payer and the recipient.

The ECB sees the digital euro as a way to strengthen Europe's payments sovereignty and reduce dependence on non-European companies. Cipollone pointed out that two-thirds of euro-area card transactions are processed by foreign firms, which could be reduced with a digital euro. The bank also aims to issue the digital euro as early as 2029 if the necessary legislation is passed and technical work is completed.

However, critics have warned that government-issued digital currencies could broaden financial surveillance, citing concerns over personal privacy and national sovereignty. In response, lawmakers in the US are advancing a bill to prohibit the Federal Reserve from issuing a central bank digital currency (CBDC).