Only offline digital euro payments stay between payer and payee

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The digital euro will make offline payments invisible to everyone except the two parties involved in the payment.

Commercial banks that handle online transactions are still able to see them, said Piero Cipollone, a member of the ECB’s Executive Board, in an interview published this week.

Banks keep the identities the Eurosystem cannot see

Cipollone was asked whether the ECB would be able to track what each citizen would do with the currency. He said offline payments would go directly from one person to another, with the record available only to the payer and the payee.

He said the Eurosystem “would not be able to identify the users making or receiving payments” online. The ECB released the interview on Monday, August 11. It was done on August 10.

For example, to check for money laundering, Cipollone said that banks involved in a transaction could still find out who the parties were.

Even though the currency is designed to be private, it still has to follow the same rules for reporting as all other money, and the commercial banks that distribute it still have to follow the same identity duties as before.

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

He promises cash anonymity only for offline payments, and only within the limits set by the laws governing electronic money across the bloc.

Lawmakers and privacy advocates, as well as some in the crypto community, have warned state-issued digital currencies could expand financial surveillance.

President Donald Trump stopped federal agencies in January 2025 from making or promoting a central bank digital currency in the US. He did so because of fear about the privacy and sovereignty of the country.

The Anti-CBDC Surveillance State Act, which would stop the Federal Reserve from making a CBDC, has been advocated by lawmakers.

A 12-month pilot starts in late 2027

The European Parliament agreed on its negotiating position on the digital euro regulation in July. The goal of the talks with member states is to reach a deal by the end of this year.

The ECB has chosen 36 payment providers to take part in a 12-month pilot that will begin in the second half of 2027. Deutsche Bank, UniCredit, and Revolut are among the selected providers.

The ECB has repeatedly mentioned 2029 as the goal date for the first issuance. The issuance is pending approval of the legislation and completion of the technical work.

In a public lecture in Latvia, Cipollone said two-thirds of euro-area card transactions are controlled by non-European companies and that this dependence is a strategic vulnerability that the digital euro could neutralize.

EU member states have clashed over costs, banking-sector risks, and design questions such as user holding limits, Cryptopolitan reported last year.

The ECB’s simulations show that generous limits could move up to 700 billion euros out of bank deposits and into digital wallets.

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