Privacy appears to be dropping down on the priority list of those designing a new digital euro, and experts are warning that the design choices being made could make privacy harder to achieve.
There have been no formal policy decisions about whether to issue the euro in a new, digital format, but there’s clearly momentum behind the idea. Euro finance ministers will discuss the issue on Monday, and a consultation is due from the European Commission imminently, a likely precursor to new laws.
Ensuring that a digital euro safeguards privacy emerged as the No. 1 issue in a consultation the European Central Bank carried out last year. Understandably so, as data about spending habits could reveal sensitive details about a person’s lifestyle, tastes and political leanings.
But privacy concerns don’t seem to be a sacred cow anymore. More recent ECB research, this time based on discussions with panels of EU citizens, emphasizes other, competing concerns people might have, such as security and universal acceptance, and ECB board member Fabio Panetta now speaks of a “trade-off” among those goals.
Finance ministers from the currency zone are also set to give their views at a meeting next week, and they are unlikely to want new kinds of financial secrecy undermining anti-money laundering and tax evasion norms.
A fully anonymous digital currency would raise “serious concerns,” says the internal policy paper that will form the basis of their discussion and that was seen by CoinDesk.
That fits with the trend seen in conventional cryptocurrency markets, where national governments – and, as of Thursday, the European Parliament – have been keen to bring in customer identity checks for even small bitcoin payments, despite industry complaints about invading privacy.
