Digital Euro Association calls for strong privacy protections in CBDC development


Yesterday, January 19th, the Digital Euro Association (DEA) published a paper highlighting the importance of privacy in the development of a Central Bank Digital Currency (CBDC) for Europe. The paper, entitled “Privacy and CBDCs” states that preliminary evidence suggests that the level of privacy associated with CBDC use will be a key determinant of its adoption and usage.

In 2021, the European Central Bank (ECB) conducted a public consultation on a digital euro, which received responses from 8221 individuals. According to the report, privacy was the most important feature required by individuals, although the results varied depending on the country analyzed.

Recommendations by the Digital Euro Association

The latest DEA paper makes a number of recommendations for ensuring the privacy of individuals and their financial information in the development of a CBDC. These include:

  1. Including strong encryption and security protocols in the CBDC design, considering also those utilized in distributed ledger technology.
  2. Obtaining early buy-in from key actors in the CBDC ecosystem to ensure they are in agreement and compliant with relevant privacy standards and protocols.
  3. Establishing clear, transparent and consistent standards for data protection and privacy in CBDCs.
  4. Implementing robust auditing and monitoring systems to timeously detect and prevent any potential breaches of privacy.
  5. Developing an uncompromising disciplinary regime for violations of privacy policies.
  6. Working closely with stakeholders and the general public towards factual CBDC education to quell myths related to CBDC privacy.

The DEA paper is a reminder that as the world moves towards a digital-first economy, privacy concerns must be considered and addressed. As the ECB report shows, individuals are concerned about the protection of their financial information and the DEA’s recommendations offer a roadmap for ensuring that these concerns are met.

CBDCs come with potential benefits and risks

It is worth noting that while the development of a CBDC could bring many benefits, such as increased financial inclusion and reduced transaction costs, it also poses new risks. For example, if a CBDC is not designed with strong privacy protections, it could be used to track individuals’ financial transactions and potentially be used for surveillance. Therefore, it’s crucial that the privacy of individuals is considered and protected throughout the development process.

Overall, the DEA’s paper serves as a call to action for policymakers, regulators, and technology providers to work together to ensure that the development of a CBDC for Europe is done in a way that prioritizes privacy.

Read more about CBDCs on Ledgernomic:


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