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Users Demand Anonymous Digital Euro

Citizens call for an anonymous Digital Euro, but will the EU approve it? Europe’s central bank is studying how anonymous digital euro payments can be.

  • Central Bank executive talks privacy as Parliament votes to scrap it.
  • Europe’s digital currency could allow anonymous payments for small amounts.

Users Demand Anonymous Digital Euro. The European Central Bank (ECB) is working on the design of the Digital Euro, keeping in mind that it must meet users’ needs to gain wide adoption. However, citizens value payment methods that better protect private data, which is at odds with policies to prevent money laundering and terrorist financing. What will the European Union approve?

Digital Euro Privacy

Fabio Panetta, leader of the digital euro project, presented yesterday at the Committee on Economic and Monetary Affairs of the European Parliament the progress of the investigation conducted by his team. Panetta is also a member of the ECB’s Executive Board. 

He said all respondents would welcome payment options allowing them to control their personal data.

“I find it surprising that citizens expect Digital Euro payments to ensure compliance with rigorous privacy standards because they reject that companies increasingly monetize their payment data as digitization progresses. We [the ECB] already provide cash, the payment instrument with the highest level of privacy. As a public institution, we are resolved to maintain citizens’ trust in this respect if a digital euro is issued.” Fabio Panetta, ECB Executive Board member


However, concerns about possible circumvention of the rules present challenges to those working on the design of the digital euro, so they are handling several alternatives, as discussed by Panetta. One of these options offered for the digital euro is to allow private payments for tiny amounts. If the transaction is small, the CBDC transaction may remain anonymous.

However, Panetta’s statements contrast sharply with the treatment of Bitcoin, considering that the limit under the FATF (Financial Action Task Force) Travel Rule is €1,000. The policy remarks that Virtual Asset Service Providers (VASPs), like crypto exchanges, must collect and share customers’ data transacting above the above amount. (See our previous post about Bitcoin and CBDCs

The European Parliament is voting on a proposal to force the identification of all Bitcoin and other cryptocurrency transactions in the eurozone. Lawmakers believe people could easily use cryptocurrencies to circumvent regulations. They want to remove barriers, even though it is evident that cybercriminals prefer fiat to launder money.


The digital euro will not be anonymous

What is certain is that the ECB is working, intending to move forward with implementing the digital euro. And “in recent months, we have been looking at different options to address the trade-off between maintaining a high level of privacy and the other important public policy goals,” Panetta said. 

The digital euro team leader added that total anonymity is not a viable public policy option because it would raise concerns that fraudsters could use the CBDC for illicit purposes. Therefore, users must identify themselves when registering on the digital euro platform.


Another option the ECB team handles is for the digital euro to offer a scenario like the private payment solutions. Still, in this case, the protection of user data and compliance with security policies would be left to the intermediaries.

We have also been studying more private alternatives, and if the European Union opts for them, then the digital euro could have characteristics similar to those of cash,” said Panetta. In that framework, it only remains to wait for the decisions lawmakers will take later regarding the design of the digital euro.



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