The European Union’s data protection authority on Wednesday urged tougher privacy protections in EU draft legislation.
One of several central banks across the world attempting to keep up with technological advancements in payments is the European Central Bank (ECB), which is expected to announce soon that it will go forward with more preparations for a digital euro.
Consumers are afraid that a draft regulation being presented by the European Commission to establish the legal foundation for the digital euro could replace cash and enable governments to monitor consumer spending.
To offer additional time to resolve worries that the digital euro won’t provide the anonymity of cash for small-value transactions, the finalization of the draft law has been delayed.
The European Data Protection Board (EDPB) stated that it “strongly recommended” including in the draft law a privacy threshold for online transactions using the digital euro “under which neither offline nor online low-value transactions are traced for purposes of anti-money laundering and for combating the financing of terrorism.”
The draft law should also “further clarify” the ECB’s and PSPs’ obligations with regard to data protection.
“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,” said the EDPB.
The board expressed its strong support for giving users of digital euros the option to pay with either cash or digital euros at any time.
Irene Loizidou Nicolaidou, the EDPB’s deputy chair, stated that “a high standard of privacy and data protection is instrumental in citizens’ trust in this new digital currency.”
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