The EU’s data protection watchdog has emphasised the importance of bolstering privacy features in the draft legislation for the digital euro.
According to Reuters, this recommendation comes as the European Central Bank (ECB) is gearing up to announce its continued plans for the digital currency. Globally, many central banks are venturing into the digital currency realm, in an attempt to stay aligned with the rapid advancements in payment technologies.
Although the European Commission has presented a draft law intended to provide a legal structure for the digital euro, there are rising concerns among consumers. They fear that the digital currency might gradually replace cash, which, in turn, could enable authorities to closely monitor individual spending habits. To address these worries and ensure that the digital euro can offer similar anonymity as cash for smaller transactions, the draft law’s approval process has been temporarily paused.
The European Data Protection Board (EDPB), in its recent statement, fervently advised amending the draft legislation. The board proposed a privacy threshold for online digital euro transactions, ensuring that both offline and online low-value exchanges remain untracked, particularly in relation to anti-money laundering and counter-terrorism financing activities. Additionally, the EDPB highlighted the need to further define the data protection duties of both the ECB and payment services providers (PSP). The board explained, “This includes the legal bases the ECB and PSP should rely upon, and the types of personal data they should process for the issuance, distribution and use of the digital euro,”.
The EDPB strongly applauded the option given to consumers to choose between digital euros or cash for payments. EDPB’s deputy chair, Irene Loizidou Nicolaidou, emphasised, “A high standard of privacy and data protection is instrumental in citizens’ trust in this new digital currency.”
Keep up with all the latest FinTech news here.
Copyright © 2023 FinTech Global
