Privacy and Banking Risks Dominate Talks on Digital Euro

The European Central Bank is once again pushing its vision for a digital euro, but the plan has run into heavy debate inside the European Parliament. Lawmakers are split between seeing it as a safeguard for Europe’s payment systems or a threat to privacy and traditional banks.

Good to Know

• ECB expects legislation on the digital euro by mid-2026, with rollout possible by 2029.
• The project is meant to complement cash and protect EU independence in payments.
• Critics warn of privacy issues and risks for commercial banks if citizens shift deposits.

Piero Cipollone, a member of the ECB’s board, spoke before parliament’s economic committee and described the project as a way to guarantee that “all Europeans can pay at all times with a free, universally accepted digital means of payment, even in case of major disruptions.”

He stressed that most of the current infrastructure behind Europe’s digital payments is run by non-EU companies. That reliance, he said, leaves the bloc exposed if a crisis strikes. For the ECB, the digital euro is a fallback option—something that could keep payments running during cyberattacks or network outages.

Privacy Questions and Banking Risks

Lawmakers quickly raised tough questions about whether a digital euro would really protect privacy. Some fear citizens could flock to central bank accounts, leaving commercial banks at risk of losing deposits. Pierre Pimpie, from the Patriots for Europe group, argued that “accounts in private banks could be emptied” if people saw the ECB as the safer place to store money.

Cipollone rejected the privacy worries, saying the central bank “will not know anything about the payer and the payee.” He also said an offline option would work “as good as cash in terms of preserving the privacy of the people.”

On the question of limits, the ECB plans to cap how much digital euro individuals can hold. Cipollone explained the cap would be “on the basis of rigorous analysis,” not politics. He warned that in a real crisis, wealthy investors could quickly move to stablecoins backed by other currencies, meaning the digital euro would hardly be the biggest problem.

Timeline

The ECB expects that parliament, the European Commission, and the European Council will all need to approve the legal framework by mid-2026. Once that happens, the central bank would still need several years to test and build the infrastructure. That puts a likely launch date around 2029 if no delays occur.

Cipollone also reminded lawmakers that cash remains important for inclusion and resilience, but digital payments are now “essential to daily life.” The digital euro, he said, is about making sure Europe does not fall behind as the US promotes dollar-backed stablecoins and private crypto markets continue to grow.