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LONDON : Tougher privacy safeguards are needed for using a digital euro online, consumer lobby Finance Watch said on Tuesday, in the latest sign of mounting “Big Brother” concerns policymakers are having to confront.
The European Central Bank is due this month to say if it will push ahead with a digital euro, one of many central banks across the world, including the Federal Reserve and Bank of England, seeking to keep ahead of technological advances in payments.
The European Union’s executive European Commission has proposed a draft law that would give legal underpinning to a digital euro, but critics worry it will lack the anonymity of using cash and supplant cash.
Finance Watch said in a policy paper on Tuesday that a digital euro, protected by adequate privacy and data protection measures, could reduce the dependency of European citizens on a small number of dominant payment firms and Big Tech platform operators, and prevent further market concentration.
Finance Watch said it accepted that some concessions would have to be made to ensure a digital euro is not used for money-laundering, making full, cash-like anonymity of digital payments difficult to achieve.
Nevertheless, as drafted, the proposed EU law gives higher levels of privacy to offline use of a digital euro stored in a customers “wallet”, Finance Watch said.
“While the proposed approach to offline transactions goes a long way towards offering cash-like privacy, a higher level of privacy and data protection should also be applied to small, low-value online transactions,” Finance Watch said.
EU financial services chief Mairead McGuinness said last month that the draft law, now being approved by EU states and the European Parliament, should not be rushed.
The Bank of England has said a “national conversation” is needed to assuage public fears that a digital version of the pound would allow government to spy on people.
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