The digital euro faces skepticism in Germany due to privacy concerns

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In Germany, skepticism about the digital euro is growing as the European Central Bank (ECB) moves closer to a decision on its implementation, scheduled for late 2025. A new report from Bloomberg reveals that Germans, especially older generations, are still concerned about the security and privacy of the digital euro currency.

In addition to concerns about data tracking and potential misuse, Germany’s long-standing preference for cash also contributes to its deep resistance to digital financial solutions.

The ECB plans to address these concerns by adopting advanced security measures such as data encryption and offering digital currency on cards for offline use.

According to ECB President Christine Lagarde, the ECB wants the digital euro to coexist with physical cash, not replace it. The goal is to include everyone, even those less comfortable with new technologies.

There is a generational gap in comfort level with digital transactions, the report said. Young Germans are more open to the idea of ​​a digital euro. However, Joachim Nagel, president of the Deutsche Bundesbank, believes that Germans can be convinced by the availability of cash.

Nagel also noted that the aging population is becoming increasingly tech-savvy and that they recognize the need to adapt to new developments.

In addition to Germany, many countries such as Austria and Slovakia also prefer cash to digital payments. Meanwhile, others such as the Netherlands have embraced them.

Evelien Witlox, director of the digital euro project, said the ECB is actively considering issuing a digital euro, but “it’s not inevitable at this point.” The main motivation for the digital euro is to reduce Europe’s dependence on non-European payment services.

If adopted, the digital euro would become legal tender, meaning companies that accept digital payments would have to accept it, Witlox said.

US lawmakers are pushing back

According to Atlantic Council data, approximately 134 countries are exploring a central bank digital currency (CBDC). A number of nations, including China, Russia and Brazil, have moved to the pilot stage.

The US is currently in the research and exploration stages of developing a digital dollar. But Federal Reserve (Fed) Chairman Jerome Powell said the central bank has no plans to create one.

“In terms of CBDC, there’s really nothing new going on,” Powell said during a meeting of the Federal Open Market Committee last month. “Not much going on at all.”

Like the Germans, Americans are unlikely to favor central bank-backed virtual currency. Opposition is growing among many political figures and groups due to concerns about government surveillance of citizens’ financial activities.

Last September, Congressman Tom Emmer introduced the CBDC Anti-Surveillance State Act in an attempt to block the Fed from issuing a retail CBDC. It was passed by the House of Representatives in May and now awaits a Senate vote.

A companion bill was introduced by a group of five senators, including Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd and Mike Braun, in February of this year. The bill also seeks to prohibit the Fed from creating a CBDC directly for individuals, indirectly through intermediaries or using it to implement monetary policy.

US candidate Donald Trump publicly opposed the idea of ​​a CBDC. He said at the Bitcoin 2024 conference in Nashville that he would never allow it to form under his administration.

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