Proposed digital euro designs lack privacy options, ECB presentation shows
Transactions via the EU’s prospective CBDC could be transparent to intermediaries, as any non-crypto digital transactions are.
Next to the fears of government overreach that the European Union’s ambitious digital euro project stirred, the main concern of the public is the prospective currency’s privacy framework. It appears that this worry might not be overblown after all, as the European Central Bank’s (ECB) latest presentation hints that user anonymity is not a desirable design option.
On Tuesday, crypto venture adviser and European digital asset regulation whistleblower Patrick Hansen drew public attention to the ECB’s presentation titled “Digital Euro Privacy options.” The document is relatively short and contains nine slides that lay out the possible options for user privacy in the EU’s Central Bank Digital Currency (CBDC), also known as the digital euro.
Acknowledging the public concern for the CBDC’s privacy, the presentation stresses the need to assess the issue “in the context of other EU policy objectives, notably anti-money laundering and countering the financing of terrorism (AML/CFT).”
What this bureaucratic verbiage means in practice is that the baseline privacy scenario for the digital euro project is all transaction data being transparent to intermediaries such as banks. The option of providing a higher degree of privacy for low-value transactions is still on the table, though, and “could be investigated with co-legislators.”
However, the overall mood of the document can be expressed in a single quote from slide four, which goes: “User anonymity is not a desirable feature.” At this point, Hansen concludes, it isn’t clear how exactly the digital euro would differ from the existing fiat-based infrastructure for digital payments.
The public feedback section for the digital euro contains more than 13,000 replies by the press time, mostly critical to the CBDC project. Meanwhile, the ECB and Eurosystem have begun experimental prototyping of the customer interface of the digital euro at the end of April.