In a detailed interview about the digital euro, former European Central Bank (ECB) director Ulrich Bindseil sought to calm public fears that a future central bank digital currency (CBDC) will restrict financial freedom. The discussion began by highlighting citizens’ concerns that the ECB could gain “even more power,” introduce expiry dates for money or dictate how people spend it.
Bindseil, who led the ECB’s Market Infrastructure and Payments directorate and oversaw around 300 staff working on the digital euro until June, is now an honorary professor at TU Berlin. He described the project as the logical continuation of central bank money into the digital age, at a time when cash is used less frequently for everyday payments.
Public option in a digital payments market
Bindseil framed payments as a “network good” where successful private providers, such as major card schemes, can gain significant market power over time. In his view, a digital euro would preserve a publicly provided payment option in a world where some shops already refuse cash and electronic payments are dominant.
He argued that without a digital form of central bank money, citizens could gradually lose access to public money altogether, leaving the field to private intermediaries. The digital euro, as currently envisaged, would be legal tender and accepted by any merchant that already accepts electronic payments, which he says would make it broadly usable from day one.
On criticism from banks, Bindseil insisted the ECB is “acting defensively,” seeking only to modernise a product, cash, whose usage is declining, rather than to drain deposits from commercial lenders. If no digital euro is introduced, he said, the fall in cash in circulation will mainly benefit bank deposits, as seen in countries like Sweden.
Surveillance, account freezes and privacy
Addressing fears of “mass surveillance” and a “glass citizen,” Bindseil said the ECB does not want to see users’ names and plans to hold only anonymous account addresses. Customer identities would remain with banks and other intermediaries that distribute the digital euro. He stressed that intrusive monitoring or transaction controls would also be technically possible with private electronic money, and are not unique to a CBDC.
On the risk of account freezes, he noted that governments today can already freeze bank accounts, and that this power has been abused by authoritarian regimes, despite the absence of any digital central bank currency. The digital euro, he said, is intended as a payment instrument alongside bank accounts, not a replacement for them.
Bindseil also discussed privacy in offline payments, explaining that the ECB and EU policymakers associate true anonymity primarily with offline, device-to-device transfers, although technical work remains to reconcile anonymity with fraud prevention and holding limits.
Ultimately, he argued that citizens who fundamentally distrust the ECB or lawmakers will continue to have alternatives, such as cash and private electronic payment methods. The digital euro, in his words, will have to “compete” with Apple Pay-style services on convenience, rather than rely on coercion or exclusive privileges.