The European Central Bank (ECB) reports that the developing digital euro (CBDC) will ensure a high level of security for users’ personal financial data and protection against tracking individual transactions.
The ECB released a report on the progress of the central bank digital currency (CBDC) development. The document places significant emphasis on privacy issues, which are of the greatest concern to potential users.
Representatives of the ECB state that the future digital euro will adhere to high privacy standards, ensuring that its use will be as close as possible to cash transactions.
Specifically, according to the document, the European CBDC will feature pseudonymization, hashing, and encryption to protect against tracking individual transactions. Additionally, the commercial use of personal financial data by payment service providers will be impossible without user consent.
The document also describes methods for conducting P2P transactions offline. Such operations will be processed directly on the payment devices used by the users, without the need for an intermediary. Smartphones or smart cards can serve as payment devices.
Furthermore, the document notes that the Rulebook Development Group (RDG) specialists, responsible for developing standards and regulatory rules for the digital euro, plan to present the first draft of the documentation by the end of 2024. This will be preceded by a consultation period with service providers, infrastructure developers, and the general public. The working group released a draft set of rules for the CBDC at the beginning of 2024.
