Transactions through the EU’s proposed digital Euro could be transparent to intermediaries, just like any other non-crypto digital transaction.
The public’s main concern, aside from concerns about government overreach raised by the European Union’s ambitious digital euro project, is the privacy framework of the prospective currency. This concern appears to be overblown after all: as the European Central Bank’s (ECB) latest presentation suggests, user anonymity is not a desirable design option.
Patrick Hansen, a crypto venture advisor and European digital asset regulation whistleblower, drew public attention to the ECB’s presentation titled “Digital Euro Privacy Options” on May 3. The document is relatively short, with 9 slides outlining the potential user privacy options in the EU’s Central Bank Digital Currency (CBDC), also known as the digital euro.
Recognizing public concern about the CBDC’s privacy, the presentation emphasizes the importance of evaluating the issue “in the context of other EU policy objectives, particularly anti-money laundering and counter-terrorism financing (AML/CFT).”
In practice, this bureaucratic jargon means that the baseline privacy scenario for the virtual currency project is that all transaction data is transparent to intermediaries such as banks. However, the option of providing greater privacy for low-value transactions is still on the table and “could be investigated with co-legislators.”
The overall mood of the document, on the other hand, can be expressed in a single quote from slide 4, which reads: “User anonymity is not a desirable feature.” As Hansen concludes, it is unclear how the digital euro would differ from the existing fiat-based infrastructure for digital payments at this time.
By press time, the public feedback section for the digital currency had received over 13,000 responses, the majority of which were critical of the CBDC project. Meanwhile, at the end of April, the ECB and Eurosystem began experimental prototyping of a digital euro customer interface.
