European Central Bank (ECB) executive board member Fabio Panetta promises that the digital euro will respect the privacy of consumers.
In a Financial Times report, Panetta says the digital version of the euro will offer more privacy to users compared to stablecoins issued by private companies.
He highlights that the ECB is not interested in monetizing user data.
“If the central bank gets involved in digital payments, privacy is going to be better protected… because we are not like private companies. We have no commercial interest in storing, managing or monetizing the data of users.”
According to Panetta, the ECB had conducted tests to separate the identity of the users from their payment details to ensure the public that the transactions remain private.
“The payment will go through, but nobody in the payment chain would have access to all the information.”
In an effort to further protect consumer privacy, Panetta says the central bank had also performed experiments involving offline payments for small amounts where no data is recorded between the payer and payee.
However, Panetta warns that absolute privacy will not be guaranteed as authorities can still trace transactions associated with illegal activity.
“For very small amounts, we could permit really anonymous payments, but in general, confidentiality and privacy are different from anonymity. A payment can be reconstructed [after the event] if the police want to assess whether there’s been any illicit activity.”
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