The European Central Bank (ECB) is in the process of preparing for the launch of a digital Euro Central Bank Digital Currency (CBDC) by October 2025. Privacy and data protection are top priorities for the central bank, but there are concerns about how the digital Euro could actually result in the opposite. Crypto entrepreneur and investor Daniel Batten raised some alarming features of the currency, such as increased surveillance, deplatforming capabilities, account freezing options, and limits on how much currency people can hold.
A CBDC is essentially programmable money on a blockchain governed by smart contracts, giving the central bank control over how much of the digital Euro people can hold in their accounts. The goal is to eventually eliminate cash and transition all financial transactions online, allowing for monitoring and tracing of transactions. While the ECB claims the limits are not meant to prevent the digital Euro from being a store of value, Batten argues that this would give banks the ability to easily surveil individuals, potentially deplatform them, and freeze their accounts as desired.
The digital Euro CBDC also incorporates an “offline functionality” that would provide users with a level of privacy similar to using cash, enabling payments without an internet connection through pre-funded accounts. However, critics point out that this functionality would still require the use of the central bank’s database, raising concerns about the actual privacy provided. A decision on issuing a digital Euro CBDC will only be made after the European Union legislative process is completed and the current preparation phase concludes, leaving room for further debate and scrutiny on the currency’s features.
In recent years, Europe and several other countries have been actively working towards phasing out cash and transitioning to a digital currency controlled by the central bank. Currently, only three countries – Nigeria, the Bahamas, and Jamaica – have deployed a CBDC, while 36 CBDC pilots are ongoing globally, including in Europe, China, Russia, Brazil, India, Japan, South Africa, and Australia. This trend indicates a strong interest and push towards digital currency adoption, raising questions about the potential impact on financial privacy and individual control over funds.
As the ECB progresses in its preparations for the digital Euro CBDC, concerns about increased surveillance, account freezing capabilities, and limits on currency holdings continue to be raised by experts and observers. The shift towards digital currency and the potential elimination of cash could lead to a more controlled and monitored financial environment, impacting individuals’ privacy and financial autonomy. With ongoing CBDC pilots around the world, including in Europe, the debate on the implications and risks of digital currency adoption is likely to intensify in the coming years, as countries navigate the balance between innovation and privacy in the financial sector.
