Concerns raised by US lawmakers about central bank digital currencies evolving into tools of state surveillance are sharpening the contrast between American and European approaches to digital public money. The debate resurfaced this week after renewed warnings from Washington that digital currencies and digital identity systems could erode civil liberties, even as Europe presses ahead with the digital euro project.
In a recent interview reported by Cointelegraph, US Congressman Warren Davidson argued that legislative efforts around digital payments risk laying the foundations for a permissioned financial system with built-in monitoring. Davidson framed the issue as one of constitutional principle, warning that a combination of digital money and digital identity could enable what he described as a surveillance state.
Those concerns were echoed in a subsequent post on X, where Davidson criticised what he called “cosmetic” protections in proposed US digital asset legislation and reiterated his opposition to any form of central bank digital currency. While the post itself focused on domestic US politics, the rhetoric highlights how deeply polarised the CBDC debate has become across the Atlantic.
A very different European framing
In Europe, the digital euro discussion has taken a markedly different tone. The European Central Bank and EU legislators have consistently presented the project as a defensive response to declining cash usage, growing dependence on non-European payment providers, and the rise of private stablecoins. Surveillance fears are acknowledged, but they are framed as design challenges rather than reasons to abandon the concept altogether.
ECB officials have repeatedly stressed that the digital euro would not replicate the data visibility associated with commercial payment platforms. Offline payments, limited data access at infrastructure level, and strict separation between identity checks and transaction data are positioned as core safeguards, not optional features.
This divergence reflects deeper institutional and cultural differences. In the United States, scepticism toward centralised public infrastructure in finance runs strong, particularly among lawmakers aligned with the crypto movement and small-government ideology. In the euro area, by contrast, central banks are seen by many policymakers as legitimate custodians of public money, provided privacy and proportionality are legally enforced.
Digital ID as the fault line
Digital identity sits at the heart of the transatlantic divide. In US political discourse, digital ID is frequently portrayed as an existential threat to personal freedom. In the EU, it is increasingly treated as a necessary layer of public infrastructure, albeit one that must operate under data minimisation rules and judicial oversight.
The European Union’s broader digital identity framework, including the EU Digital Identity Wallet, is advancing in parallel with the digital euro debate. For critics like Davidson, this convergence would be a red line. For European policymakers, it is often framed as a way to strengthen consumer protection and reduce fraud, rather than to monitor spending behaviour.
Why this matters for the digital euro
The US debate matters for Europe even if the policy outcomes differ. Global narratives around CBDCs shape public trust, investor sentiment, and geopolitical alignment. Persistent framing of digital currencies as surveillance tools risks spilling over into European public opinion, complicating already delicate legislative negotiations in Brussels.
At the same time, the contrast gives European institutions a clearer incentive to articulate what makes the digital euro fundamentally different. If the project is to succeed, it must not only meet technical privacy standards but also convincingly distinguish itself from the dystopian scenarios dominating parts of the US debate.
As the digital euro moves closer to potential legislative approval, the question is no longer whether surveillance concerns exist, but whether Europe can demonstrate, in practice, that a public digital currency can function as digital cash rather than digital control.