Digital Euro’s Hidden Risks Revealed–Patrick Schueffel on Privacy and Control Concerns

The future of European finance is at stake. The Digital Euro proposal has sparked a heated debate between supporters and critics, raising concerns about privacy, control, and the very nature of money.

Christine Lagarde, President of the European Central Bank (ECB) , has announced an ambitious plan to launch a digital euro by October 2025 to modernize the euro. But is it feasible, and what are the consequences?

CCN interviewed Dr. Patrick Schueffel, an adjunct professor at Fribourg’s School of Management and a corporate advisor. His research focuses on banking, finance, and entrepreneurship, with extensive publications in academic journals. A former C-level executive in Swiss and Liechtenstein banks, Schueffel is also a strong critic of the Digital Euro.

In this conversation, he shares his views on Lagarde’s target, the challenges of digital euro adoption, its coexistence with stablecoins, and the broader implications of a CBDC on privacy and government control.

Christine Lagarde’s 2025 Goal for the Digital Euro

Christine Lagarde’s goal is to launch the Digital Euro in October 2025. However, as the date approaches, its impact and adoption challenges remain key considerations.

Will the Digital Euro meet its ambitious deadline, or is the timeline too optimistic? 

Schueffel considers that Lagarde “made this statement subject to the provision that all relevant stakeholders agree to the Digital Euro, but we also don’t know whether she was referring to a minimal viable product, to a pilot or to a full-scale rollout.”  

“Only she knows,” Schueffel states.

“Will we see a full-scale roll-out in October ‘25? No. Banks are simply not prepared for this scenario. Neither the technology will be in place by October nor the necessary processes”, he says.

The Digital Euro’s Toughest Sell–Why Consumers Might Reject It

Schueffel believes the biggest challenge is that “from a consumer point of view, there is simply no need for a Digital Euro. Citizens of the Eurozone enjoy SEPA instant payments already today. On the push of a button on their mobile banking app they can pay or transfer money.” 

He questions, “why should anyone first transfer money from his or her bank account to his or her digital euro wallet in order to then pay a third party or send money?”

Schueffel argues that the process, which also works in reverse when digital euros must be converted into commercial bank money, creates an unnecessary “cumbersome and time-consuming detour” that could discourage adoption.

Digital Euro vs. Stablecoins–Fair Competition or Forced Adoption?

A major concern is how the Digital Euro will interact with stablecoins and other digital assets. Schueffel asserts that if there were fair competition, the Digital Euro “wouldn’t stand a chance.”

“The EU, along with the ECB, have launched a two-pronged attack against the freedom of choice of citizens: on the one hand, the EU is tightening the screws around stablecoins with regulations such as the MiCA travel rule… On the other hand, the ECB presses for the Digital Euro to become a ‘mandatory legal tender.’ That means that virtually no vendor can refuse its acceptance,” he explains. 

Europe’s Digital Euro Dilemma: A Gateway to Surveillance and Financial Control?

Schueffel sees unprecedented risks associated with CBDCs, warning that the Digital Euro could enable financial surveillance and control.

“With a CBDC infrastructure such as the one underpinning the Digital Euro, a technology will be rolled out that can be abused for surveillance and control like no other in human history.”

He explains the long-term implications relating them to surveillance and censorship, financial control and data abuse.

“Not only will it be registered on an eternal digital ledger which purchases you made from cradle to death bed, but any payment can also be censored on a keystroke.”

He warns that people “will no longer have discretionary power over the cash they hold,” as spending could become subject to government approval. 

He draws parallels to past assurances about technologies like GPS, mobile phone data, contact tracing apps, facial recognition, social media platforms, and biometric data, all of which have later been “abused by governments against their own people,” even after initial reassurances to the contrary.

His conclusion is blunt:

“After all, giving governments CBDCs and hoping that they won’t abuse them is like pouring the alcoholic a glass of whiskey and hoping that he won’t drink it,” he says.

No Real Safeguards? Schueffel Questions the Digital Euro’s Promises

Schueffel doubts that users can be guaranteed safeguards against the potential risks of a digital euro.

“I see no realistic safeguards. Any legal safeguards put in place today can be reverted by changing legislative majorities in the future.”

While he acknowledges that certain technical features could enhance safety—such as “a public ledger built with open-source code and which runs on public nodes”—he remains skeptical that such measures will be adopted. He emphasizes the need for a decentralized system that ensures immutability, irreversible transactions, and uncensorability but questions whether these principles will be upheld in the case of the Digital Euro.

“A technology that ensures immutability and thus irreversible transactions, that is decentral and thus ensures uncensorability. And – of course – anonymity or at least ZKP-technology would be a necessary safeguard. However, it’s highly doubtful that such a system will ever be put in place,” he clarifies.

Future of the Digital Euro and Its Economic Impact

Schueffel critiques the argument that a digital euro would benefit the economy and society. Supporters claim it would allow the ECB to directly influence the money supply, better control interest rates, and enhance financial stability while promoting the familiar motto of “banking the unbanked and underbanked,” but this might all sound too optimistic.

Shueffel warns of a slippery slope toward centralization:

“Think it through: if you advocate introducing CBDCs for these reasons, you also need to support loans directly granted by the ECB, as such central bank lending would support all of those causes.”

He argues that this would fundamentally alter financial markets:

“If loans are directly given by central banks, capital markets would cease to exist: interest rates could arbitrarily be set by central banks, and risk wouldn’t play any role as defaults can easily be absorbed by the ECB as the lender of last resort.”

Drawing a historical parallel, he adds:

“The financial system would soon resemble the arrangement of the countries of the former Eastern Bloc, which were characterized by state-ownership, centralized steering and control, absence of market-based financial institutions, and strict regulation of credit.”

Summing up, Schueffel sees the Digital Euro not as a step toward financial innovation but a step backward toward centralized control and all the risks this conveys.