Data security in digital Euro

The European Central Bank (ECB) explored design scenarios for a digital euro and after consulting stakeholders, launched a central bank digital currency (CBDC) project with an investigation phase during October 2021-October 2023. Positive foreseen impacts on data protection are:

The consultation launched by the ECB in October 2020 revealed that privacy is considered as the most important feature of a digital euro by both citizens and professionals.

A CBDC could increase data protection and security in digital payments and provide payers more control over personal data.

Privacy-enhancing technologies could be used to enhance the way anonymity is wired within the entire payment process, while allowing the auditing only in pre-determined lawful cases.
Negative foreseen impacts on data protection are:

If payment data of all citizens were concentrated in a central bank’s databases, it would generate incentives for cyberattacks and a systemic risk of individual or generalised surveillance.

Payment data already reveals very sensitive aspects of a person. Wrong design choices in the underlying technological infrastructure might exacerbate the existing privacy and data protection issues in digital payments.

Security concerns in the CBDC infrastructure, whose security requirements and expectations are high, may turn into a significant loss of trust from users.

From ‘Central Bank Digital Currency’, European Data Protection Supervisor.

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