Digital Euro 2025: Every Payment Trackable by the ECB

The 2025 digital euro will record payments as small as a few cents

Imagine that the most mundane purchase — bread, a newspaper, a coffee — leaves a trail consultable by the monetary authority. This is not a dystopian series plot: it is the architecture that the European Central Bank and the European Commission have been designing for over a year under the name digital euro. Regulation is scheduled for the first quarter of 2023, and the currency, already with legal tender status, for 2025. The network will resemble a blockchain, but with a decisive detail: control will be held by a central body, not an open network. And here begins all the trouble.

What the digital euro is and when it will arrive

The ECB’s project is not a European eccentricity. Around eighty central banks are working on digital versions of their currencies, including those of Russia and the United States. China started ahead of everyone else with its own, although it has not yet launched it officially. The logic prevailing in Frankfurt is almost sporting: if others issue their own digital currency backed by fiat money, the ECB cannot just watch.

The timelines, however, are held together by a thread. Both the technology needed to support millions of instant transactions and the pending regulation are the two major obstacles, and the calendar itself acknowledges there will be delays. The intention is to have regulation by early 2023 and the currency available three years later. Whether this will be achieved is another matter.

Every expense under the microscope: the control no one questions

In practical terms, citizens will notice little: paying, receiving, transferring. The change is for the issuer. A centralized network based on distributed ledger technology allows precise knowledge of the destination of every euro. Every transaction, even for a few cents, would be trackable in a much simpler way than today, providing the ECB with an almost perfect map of each person’s spending.

The official justification is the fight against tax fraud. The argument has its reasonable side and its uncomfortable side: the same instrument that serves to pursue those hiding income also serves to know how money is spent by those who do declare it. The boundary between fiscal control and financial surveillance becomes blurred, and no one has specified where they intend to draw it.

The Spanish digital currency that the PSOE took to Congress

In June 2021, Pedro Sánchez’s Government took an unremarked step: it brought before Congress a Legislative Proposal not for Law to promote a Spanish public digital currency, linked to the digital euro. The text called for creating, in collaboration with the Banco de España, a study group to evaluate its implementation and spoke of “recovering the character of money as a public good and under democratic control.”

The formula sounds good and admits opposite readings. For some, it returns money to its status as public infrastructure; for others, the expression democratic control acts as a password: he who controls the money controls the user. The proposal remained there, in the study phase, without its own schedule.

Is paying with digital euro the same as with Bizum?

Almost. And that ‘almost’ is the key to the matter. As one participant in the debate points out, if banknotes disappeared from circulation, one hundred percent of movements would be account entries: card, Bizum, transfer, and in principle traceable by the authority. There would be no need to invent anything new to close the circle. The digital euro does not create control; it formalizes and centralizes it.

The withdrawal of 500 euro banknotes, which are no longer issued and are being collected at the counter, is part of the same movement. By handing over the note, it automatically becomes account balance or smaller notes: large-denomination cash is losing its function without needing to be banned.

Bitcoin as a shield and its flaws

Against this scenario, the most repeated response points to bitcoin: periodic purchase, DCA and waiting. The technical argument is solid halfway. Transactions on the bitcoin network are irreversible and cannot be canceled at the whim of a State, unlike what a central bank digital currency would allow. Here the contrast is real.

Skepticism also has ammunition: it is argued that bitcoin will ultimately die of success, that if its value skyrockets it will cease to be useful for buying anything and will be invalidated as a medium of payment, and that those who truly gain from the process are the banks. Divisibility — one bitcoin equals one hundred million satoshis — settles the practical objection, not the fundamental one.

Cash, gold, and savings outside the radar

An uncomfortable argument repeats itself in the debate: imposing a CBDC does not require a law banning banknotes. It would suffice for salaries, pensions, or benefits to be paid only in the new currency. In Spain, according to calculations circulating in the debate, there are seventeen million people who receive money from the State: civil servants, pensioners, benefit recipients. For all of them, the digital currency would not be an option; it would be their paycheck.

Hence the turn to the tangible: precious metals, stored cash, jurisdictions with their own rules. The scene that remains is that of a digital currency that does not yet exist, regulation that has not yet been approved, and a part of Spanish savings already moving toward assets that do not depend on Brussels getting the calendar right.