ECB President Asserts that Digital Euro CBDC Won’t Be Completely Anonymous
The European Commission (EC) has been making significant strides toward implementing a central bank digital currency (CBDC) in the Eurozone’s 20 member states. The European Central Bank (ECB) had previously outlined plans for the digital euro, which could potentially debut by 2027, enabling seamless online and offline transactions with “public money.”
In a recent update, ECB President Christine Lagarde provided further insights into the CBDC project, with a particular focus on its security and anonymity.
Concerns About CBDC Privacy
Earlier in the week, on September 25, Lagarde passionately defended the ECB’s CBDC project, emphasizing that the currency “will not be completely anonymous as is the case with a banknote.”
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She explained, “We are working to protect privacy, but since digital money leaves a trace on the blockchain, it will not be completely anonymous as is the case with a banknote.”
Lagarde’s remarks came in response to concerns raised by some members of the European Parliament (MEPs) regarding the CBDC’s impact on user data privacy. One MEP, Gunnar Beck, asked how private life could be guaranteed without ensuring anonymity.
Access to User Data
Lagarde clarified that while the ECB would not have access to how people spend their digital cash, commercial banks would have access to user data. Commercial banks would serve as intermediaries in distributing the digital euro and would analyze the data, sharing it with CBDC users.
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She emphasized that providing the same level of anonymity as banknotes would contradict the objectives of combatting money laundering and terrorism financing. However, Lagarde assured that there would be no “ECB Big Brother” monitoring transaction details.
In summary, while the digital euro CBDC aims to offer privacy protection, it will not provide complete anonymity due to the traceability of transactions on the blockchain. Commercial banks will have access to user data, but the ECB will not monitor individuals’ spending habits.