Central bank pitches digital euro as crisis backup amid privacy and banking concerns
The European Central Bank (ECB) is once again promoting its plans for a digital euro, framing it as a safeguard during times of crisis. But during a recent parliamentary session, several EU lawmakers voiced skepticism about the currency’s design, potential risks to commercial banks, and its impact on citizens’ privacy.
ECB defends digital euro as a fallback system
Speaking before the European Parliament’s economic committee, ECB board member Piero Cipollone said the digital euro would ensure that all Europeans have access to “a free, universally accepted digital means of payment, even in case of major disruptions.”
He argued that the region’s reliance on non-EU payment providers could leave Europe vulnerable in emergencies such as cyberattacks or network outages. The ECB sees the digital euro as a strategic tool for financial resilience, complementing physical cash while meeting growing demand for digital payments.
Lawmakers highlight risks to banks and privacy
Despite these assurances, several lawmakers expressed doubts. Critics warned that if citizens were allowed to hold accounts directly with the ECB, they might move funds away from private banks, weakening the financial sector.
Privacy was another flashpoint. Cipollone emphasized that the ECB “will not know anything about the payer and the payee” and promised that an offline version would protect user anonymity like cash. Still, lawmakers such as Pierre Pimpie of the Patriots for Europe group warned that private bank accounts could be “emptied” if a safer central bank alternative exists.
Timeline: law by 2026, launch by 2029
The ECB expects digital euro legislation to be passed by mid-2026, pending approval from the European Parliament, Commission, and Council. Once the law is in place, the ECB would need up to three years to develop and test the infrastructure, suggesting a possible rollout around 2029 if no delays occur.
While officials argue the initiative would protect Europe from external risks, political concerns over privacy and banking stability remain the biggest hurdles to adoption.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.