Europe’s CBDC Creators Fight Over Privacy Issues: Report

Europe’s CBDC creators fight over privacy issues while the EU Central Bank will likely choose a solution for the new digital euro that can raise questions about state snooping so let’s read more in today’s latest cryptocurrency news.

Privacy seems to be dropping down on the priority list of the ones designing the new digital euro and experts warned that the design choices made can make some privacy harder to achieve. There hasn’t been any formal policy decision about whether to issue the euro in a new format but there’s strong momentum behind the idea. The Euro Finance minister will discuss the issue on Monday after a consultation due from the EU Commission as a new precursor to the laws.

Ensuring that the digital euro protects privacy is a number one issue in a consultation of the EU Bank carried out last year but the data about spending habits could reveal even more sensitive details about a person’s lifestyle, political learnings, and tastes. The privacy concerns don’t seem to be such an issue anymore because the recent ECB research outlined the competing concerns people could have like security and universal acceptance and ECB Board member Fabio Panetta speaks of a trade-off among the goals. Finance ministers from the currency zone are also about to give their own views at a meeting next week but there won’t is any financial secrecy undermining AML and tax evasion norms.

An anonymous digital currency will raise some serious concerns and this fits the trend seen in conventional crypto markets where national governments have been keen to bring customer ID checks for small BTC payments despite the complaints of invading privacy. According to the policy paper, the ECB will have access to data about transactiosn to an extent that can fulfill the functions like settling payments and carrying out financial oversight but the paper said that the payment data should not be fully visible to any central entity.

Panetta brushed away the concerns about the state snooping and told the EU Parliament that the ECB has no commercial interest in the use of the data and will respect the privacy laws. He also argued the details of how much privacy to offer allowing the small payments to remain secret and offline but to also remain matters for governments and lawmakers to decide and not the bankers, saying that privacy is not a technical issue but a political one.

Experts criticized his characterization and warned that overly centralized systems could make some meaningful privacy harder to achieve. Europe’s CBDC creators are having a hard time as privacy controls can’t just be added on a whim but may depend on the kind of technology.