In a blog post published by the European Central Bank (ECB), Maarten G.A. Daman, who is the data protection officer at the ECB, pointed out that the digital euro—should it actually come to be launched by the ECB’s Governing Council—would certainly not be a solution that is as privacy friendly as euro cash but would come close, particularly with regard to how the digital euro would be able to be used offline.
According to his view, the digital euro would also have the advantage of being a cross-border payment method.
Mr Daman emphasises that it will be up to legislators to devise the regulation that will provide the legal framework for the digital euro and that this regulation should strike a balance between protecting privacy and accomplishing other public policy objectives, such as combating money laundering and other illicit activities.
For instance, in the European Commission’s initial proposal, the ECB should not be able to directly attribute data to an identified user (see EUROPE 13211/11).
Protection in the context of online use
In addition, Mr Daman affirms that the online digital euro would offer more privacy protection than commercial solutions, which do allow certain personal data to be collected and transferred.
Data Protection Officer Maarten G.A. Daman asserts that the Eurosystem would implement data protection in the digital euro’s very design in several ways.
Initially, one way would be through technology: the digital euro user’s digital identity would be separated from the payment data. Consequently, the Eurosystem would only process a very limited amount of data. Moreover, this data would be pseudonymised by the bank.
Another way would then be by ensuring that service providers comply with high standards with regard to privacy and data protection as well as IT security and the fight against cybercrime—these standards being accompanied by not only strong contractual safeguards but also penalties in the event of a breach of contract.
Finally, yet another way would be to use organisational measures comparable to those that apply to all ECB staff.
Data Protection Officer Maarten G.A. Daman adds that a data protection compliance framework will be established and that audits will be implemented. An independent group will be in charge of assessing their implementation.
Mr Daman concludes that the digital euro is first and foremost a public project and that public institutions, such as the ECB, have no interest in making money with payment data.
Link to the post: https://aeur.eu/f/cn2 (Original version in French by Émilie Vanderhulst)