Can Europe Be Trusted With a Digital Euro?
Charles Hoskinson warns that a digital euro could enable transaction discrimination, while the EU’s draft law explicitly says it must not be programmable money.
Cardano founder Charles Hoskinson has challenged Europe to put a promise into law: do not use the digital euro for asset or transaction discrimination. His warning captures a real fear about central bank digital currencies. It omits an important fact, however—the current EU proposal already says the digital euro must not be “programmable money.”
Programmable money normally means currency whose issuer limits where, when or on what it can be spent. A government might theoretically block alcohol, impose an expiry date or restrict welfare payments to approved merchants. The European Commission’s draft regulation prohibits the digital euro from carrying those built-in spending restrictions and requires it to remain fungible.
The European Central Bank makes the same distinction. It says users may choose conditional payments, such as releasing money when goods arrive, but the money itself would not contain centrally imposed rules about acceptable purchases. Cash would remain available, and the digital euro would complement rather than replace it.
That directly answers part of Hoskinson’s demand. It does not eliminate every concern. A law can be amended, emergency powers can expand and implementation can diverge from political promises. Citizens are entitled to ask for durable safeguards, independent audits and effective court remedies.
Privacy is the more complicated issue. The ECB says offline payments would provide cash-like privacy and that the central bank would not be able to identify individuals from transaction data. Commercial banks and payment providers would still perform anti-money-laundering and sanctions checks for online use, meaning some intermediaries would know customer identities and process transaction information.
That is not the same as a central official pressing a button to ban groceries. It can still enable account freezes, financial profiling or mistakes by automated compliance systems. Existing bank money already faces many of those controls. A digital euro could either improve privacy through technical design or concentrate risks if identifiers and records are poorly separated.
Other practical limits matter. Proposed holding caps and a non-interest design aim to prevent mass withdrawals from commercial banks. Critics say those limits reduce usefulness and make the system dependent on bank-linked “waterfall” arrangements. Supporters argue a public payment option would reduce Europe’s reliance on US card networks and improve resilience during outages.
The best safeguard is layered: a statutory ban on programmable restrictions, minimal data collection, offline capability, open technical standards, independent supervision and a clear right to challenge freezes. Any emergency exception should be narrow, time-limited and publicly reviewable.
The debate often confuses three separate powers: programming the currency, enforcing general law against an account and analyzing payment data. Banning the first does not abolish the other two. Clear public explanations should say which actor can do what, under whose authority and with which appeal process. Without that map, both official reassurance and online alarmism can obscure the system citizens are actually being asked to use.
The legislative process is not finished. The European Parliament and member states can amend the Commission proposal, and technical rulebooks will determine how broad principles operate. Privacy advocates should scrutinize those later layers because a strong sentence in primary law can be weakened by expansive data retention or vague security exceptions.
Governance should include more than central bankers and commercial banks. Consumer groups, merchants, cybersecurity specialists and data-protection authorities need access to testing results. Open-source components and published threat models could allow independent experts to find weaknesses before deployment.
There is also a geopolitical tradeoff. A European public payment rail could preserve transactions if foreign card networks or providers withdraw services. The same sovereignty argument can be used to justify centralized control. Institutional design decides which outcome dominates.
Citizens should demand measurable guarantees: what data exist, how long they are stored, who can request them, how an incorrect freeze is reversed and whether offline balances survive device loss. A digital euro is neither automatically financial tyranny nor automatically digital cash. The proposal can be judged only by combining its statutory limits, technical architecture and the behavior of institutions operating it.
What to watch next
Watch the final regulation, the definition of conditional payments, holding limits, offline privacy tests and which institutions can link identities to transactions. Hoskinson is right that trust should not rest on assurances alone. But saying Europe has refused to legislate against programmable money is inaccurate—the prohibition is already in the draft, and the real fight is whether it survives intact and works in practice.