With global interest and the growing exploration of Central Bank Digital Currencies by central banks, privacy has become a crucial aspect to consider.
A new paper by the Digital Euro Association (DEA) working group of global experts takes a look at the topic of privacy and CBDCs. The paper examines the importance of privacy and how it impacts the successful adoption, usage, and implementation of digital currencies. Many consumers are worried that the adoption of CBDCs will open the door to government tracking and surveillance of their personal details and behaviors.
The paper also examines privacy-preserving technologies and provides recommendations for enhancing privacy and security in a CBDC system.
Key Considerations for Privacy, Security and Digital Assets
Due to concerns about government oversight of CBDCs and digital assets, the paper takes a look at:
- Reasons for privacy and the degrees of privacy in CBDCs
- Key stakeholders in the CBDC privacy conversation, including Central Banks, Commercial Banks and Merchants
- Technology’s role in consumer privacy
- How potential and existing regulations will impact CBDCs
Anthony Ralphs, Ripple’s Head of Digital Currency Product & Solutions, contributed his views, expertise, and research to this working group, with the paper concluding that each central bank will have a different view and values around privacy, but that there are some minimum standards that should be respected on a global level.
“It was a pleasure to collaborate with such an expert group of contributors on the CBDC and Privacy whitepaper. One thing the paper explores is that CBDCs—and the blockchain technology they are built upon—offer enhanced security and access management to help ensure privacy across the various use cases that are being implemented.” – Anthony Ralphs, Head of Digital Currency Products & Solutions, Ripple
Despite different use cases and implementations, it’s possible that in the future, CBDCs may increase global cross-jurisdictional data flows.
“The implementation of strong encryption methods, strict access controls, regular auditing, and a stringent disciplinary regime for privacy violations can help to ensure the security of a CBDC system. Additionally, establishing robust regulations governing the use of CBDCs can provide further protection for the privacy of individuals.” – Digital Euro Association Public Digital Euro Working Group
Download the full whitepaper for details.