“Anonymity Would Not Be Possible,” According to ECB’s Digital Euro Plans
The European Central Bank (ECB) is opening up public discussion around the implementation of its digital euro. And for privacy-centric Europeans, there’s a lot to be worried about.
Key Takeaways
- The ECB has published a 50-page report to examine the prospects of launching a Central Bank Digital Currency (CBDC).
- A member of the ECB's board said that the organization would gather views from public and interested stakeholders' from Oct. 12, 2020.
- Part of the report indicates that the anonymous use of a digital euro is unlikely, if not impossible.
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The ECB has published an extensive report explaining its move towards a digital euro. The text also outlines how “anonymity may have to be ruled out” for citizens.
Digital Euro Omits User Anonymity
The ECB has announced the necessity for the alpha bank to launch a central bank-issued cryptocurrency.
This is due to an increased demand for contactless payment, the rise of digitalization and globalization, and a threat from stablecoins and CBDCs issued by entities other than ECB.
Recently, the President of ECB, Christina Lagarde, said that the bank would move to launch a digital euro in response to rising demand for stablecoins and peer pressure from nearly 48 countries making progress in this regard, specifically China’s digital renminbi.
An ECB executive member Fabio Panetta, formerly head of the Italian central bank, has published a blog to introduce ECB’s latest report and seek public opinion. According to Panetta, the bank could lose its “financial stability or even our monetary and financial sovereignty.”
While the report considers decentralized control in its design for a digital euro, it fails to uphold its eurozone spenders’ privacy rights.
The ECB plans to give up users’ anonymity to comply with rules on anti-terrorism, money laundering, sanctions against specific countries, and halt the flow of excessive capital flight Europe. In comparing a digital euro with cash notes and coins, the report reads:
“Regulations do not allow anonymity in electronic payments and the digital euro must in principle comply with such regulations.”
Though there are two iterations of a digital euro proposed, one online and one offline.
The online version of a digital euro. “would exclude the possibility of anonymity for users.” The offline version would be anonymous, but the report indicates that the use of this version would be limited.
The clear statements regarding a digital euro’s privacy function are concerning for many. Interested parties, both public and private, can debate the report’s findings beginning from Oct. 12.
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