ECB Favors Transparency Over Privacy in Digital Euro Design, Presentation Reveals – Finance Bitcoin News

The European Central Bank (ECB) leans toward a “transparent” digital euro over one that ensures a higher level of privacy for its users, a presentation devoted to the project has indicated. In the document, the monetary authority explores different privacy options for the eurozone’s digital fiat.

Digital Euro Says User Anonymity is Not Recommended

A presentation by the European Central Bank has thrown some light on the regulator’s “preliminary views” on the privacy-related features of the digital euro. The presentation comes while the ongoing investigation of the CBDC project, which will issue central bank digital currencies in the eurozone, is taking place.

While acknowledging the importance of Europeans being able to control their own data and protect privacy, the monetary authorities states that digital payments could lead to less privacy. That’s despite the possibility to preserve some cash-like features in a digital version of the euro.

The ECB reported that privacy is a major concern for digital euro users in the future. However, the bank says privacy must be considered within the framework of EU policies. There are anti-money laundering, counter-financing terrorist (CFT), and other matters. The regulator elaborates on this matter:

It is not desirable for users to remain anonymous as it makes it difficult to track the money in circulation.

The Digital Euro Data will be Transparent, Not Private

In order to verify payments, the European central bank insists on the Eurosystem. It consists of the ECB as well as the central banks from the Eurozone member countries. Additionally, anonymous, aggregated data should be accessible for surveillance and monitoring purposes, and to fight crime and fraud.

In the presentation, brought to the public’s attention by crypto venture advisor Patrick Hansen this week, the ECB lists three privacy options for the digital euro platform. The first one, which is referred to as the “currently applicable baseline scenario,” aims to ensure that personal and transaction data is transparent to intermediaries which need to comply with AML and CFT regulations.

While the second would offer a better level of privacy, it would be more difficult to make low-value payments anonymous. The last approach is for offline transfers. Financial intermediaries and financial authorities wouldn’t have any information about low-value balances or amounts. The ECB admits that the latter two “desirable options” could be investigated together with European legislators.

Let us know your views on privacy options available for digital euros as reviewed by the European Central Bank. Leave a comment below.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.