The Digital Euro Dilemma: Anonymity vs. Privacy
Earlier this year, the European Commission (EC) introduced a comprehensive legal framework to establish a central bank digital currency (CBDC) within the Eurozone's 20 member countries.
The European Central Bank (ECB) had previously outlined plans for the digital euro, expected to debut around 2027, allowing seamless online and offline transactions with “public money.”
In a recent update, ECB president Christine Lagarde addressed concerns about the security and privacy of the upcoming CBDC.
On September 25, Lagarde defended the ECB’s CBDC project, acknowledging that it would not provide complete anonymity, unlike physical banknotes.
She clarified that while they are committed to privacy, digital transactions leave traces on the blockchain, preventing complete anonymity. Some European Parliament members (MEPs) raised questions about the balance between anonymity and personal privacy.
German MEP Gunnar Beck asked, “Can we ensure personal privacy without anonymity?”
Lagarde assured that the ECB would not have access to individuals’ spending data. Instead, commercial banks would serve as intermediaries for distributing the digital euro and have access to transaction data.
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This data would be analyzed and shared with CBDC users.
Like physical banknotes, full anonymity would contradict anti-money laundering and anti-terrorism financing objectives.
However, it’s crucial to note that the ECB would not possess CBDC user data, ensuring there is no “ECB Big Brother” scrutinizing transactions.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
