The digital euro is one of Europe’s most contentious financial projects.
Supporters see it as a way to preserve the bloc’s monetary sovereignty, reduce its reliance on foreign payment providers, and ensure central bank money survives in an online economy dominated by USD stablecoins.
Critics, however, argue the digital euro could be a way for a supranational organization to surveil — and in certain circumstances, even control — the population of Europe.
The official view is that: “The digital euro will reduce Europe’s excessive dependence on non-European providers. It will ensure that Europeans can pay with their money — the sovereign money issued by their central bank — in the digital economy,” said Piero Cipollone, member of the executive board of the European Central Bank (ECB).
The alternative perspective is that the Central Bank Digital Currency (CBDC) may curtail the freedom of citizens to spend money how they wish.
“These are the 8 most dangerous words if you care about freedom: “The digital euro is here to protect Europeans,” said former Deutsche Bank managing director Pius Sprenger.
“This is how they will be able to control EVERY euro you spend. Goodbye money. The ECB will decide how much digital money you can have,” said José Vizner, a Spanish financial commentator.
So who’s right? The suited Brussels bureaucrats who seem to get a kick out of reading your private messages or the tinfoil hat adjacent cypherpunks who want to separate money and state?
What is the digital euro?
The digital euro is a proposed digital form of the euro that would be issued by the ECB, making it a digital form of central bank money, or CBDC.
The term “CBDC” tends to raise the hairs on the back of the necks of privacy-loving crypto folk, invoking 1984-style vibes of government overreach and surveillance.
President Donald Trump signed an executive order to ban CBDCs from the US in January, citing threats to the financial system, individual privacy and the country’s sovereignty. A ban until 2030 was formalized more recently in housing bill legislation. Despite this, the ECB says they’ll do just fine for Europe.
Related: US CBDC ban to go into effect without Trump signoff on housing bill
It argues the digital euro would give people living in the euro zone another way to make everyday transactions with central bank money as payments move increasingly online; and that it will complement, rather than replace, physical banknotes and coins.
Not everyone is sold on the benefits of the digital euro. Source: Pius the Banker
“The main reason for issuing a digital euro is to preserve the benefits of cash in the digital era,” Cipellone said in an interview on July 14.
That’s nice, except that one of the major benefits of banknotes that is they can be tracked, traced and frozen at will, as Vizner pointed out. “They promise privacy… but it’s money that’s trackable by design.”
Why does Europe want one?
The ECB obviously isn’t talking up the benefits of spying on everyday payments. Instead, officials argue that as cash use declines, Europe risks becoming more reliant on private or overseas-operated payment systems like Visa or Mastercard.
Some policymakers have expressed concern that the continent lacks control over its critical payment infrastructure, with ECB President Christine Lagarde saying in 2025:
“The entire infrastructure mechanism that allows for payment, credit and debit, is not a European solution… We need to make sure there is a European offer, just in case.”
Consumer groups such as the European Consumer Organization (BEUC) have also highlighted potential benefits for users.
Deputy head of communications, Andrew Canning, told Cointelegraph that the digital euro could provide consumers with a “secure and inclusive” payment option that complements existing solutions, particularly for people who face barriers accessing digital payments.
Related: South Korea eyes September launch for second phase of CBDC pilot: Report
Yet critics argue that the digital euro would give governments and central banks control over how citizens can spend money.
These fears are not theoretical, even in Western democracies. During Canada’s 2022 Freedom Convoy protests, authorities ordered banks, crowdfunding platforms and other financial institutions to freeze accounts linked to the blockades.
Why do we need a digital euro? Source: ECB
Efrat Fenigson, a tech entrepreneur and privacy advocate, said that the digital euro could become “the infrastructure for programmable money, programmable identity and programmable behavior,” warning that “freedom doesn’t disappear overnight. It disappears one permission at a time.”
Patrick Schueffel, a professor of banking and finance at the Fribourg School of Management, also warned that CBDCs could significantly expand governments’ ability to monitor financial activity.
Are there safeguards?
The EU’s own privacy watchdogs have said the project needs strong…
cointelegraph.com