Faced with the rise of cryptocurrency, the ECB is working on the digital euro. Indeed, the European Central Bank is looking to develop their own virtual currency. Beyond a simple, fast and modern financial transaction, the aim is to guarantee a certain level of confidentiality for users. However, total anonymity is not an absolute priority for the ECB. For the time being, according to Christine Lagarde, the ECB remains focused on the development of the digital euro.
The genesis of the digital euro project
- Central banks respond with CBDCs (Central Bank Digital Currency)
- The emergence of cryptocurrencies as an alternative
- ECB project under the direction of Evelien Witlox
- Recent announcement by Christine Lagarde, President of the ECB
In the same way as Bitcoin and Ethereum, the CBDC (Central Bank Digital Currency) wants to take over the virtual market. The European Central Bank wishes to compete with virtual currencies, while remaining under the tight control of financial institutions. The ECB is thus committed to implementing a digital euro. The broad lines of this project were recently outlined by its President, Christine Lagarde.
Concerns about anonymity
Members of the European Parliament are concerned about anonymity and personal data protection in relation to the digital euro. The debate, initiated by Nicola Beer MEP, highlights the differences between the positions expressed by Evelien Witlox last April and those held today by Christine Lagarde.
Mrs. Witlox had stated that the ECB was not interested in the personal data of CBDC users. On the other hand, Mrs Lagarde’s words are more nuanced: the institution will take care to protect users’ privacy. It will not guarantee total anonymity.
Est-ce que l’anonymat total est une nécessité ?
- Emphasis on the need to avoid money laundering
- Review of existing anonymous digital currencies
- Possibility of an intermediate solution between total transparency and anonymity
Project prospects
The time has come for those responsible for the digital euro project to think things over. They need to determine the best way to ensure satisfactory traceability, while allowing users to retain a degree of confidentiality. Christine Lagarde has announced that important decisions will be taken by the ECB in the coming days.
The future digital euro will probably not be totally anonymous. It should, however, offer sufficient guarantees in terms of personal data protection and transaction confidentiality. It remains to be seen how these promises will be applied in practice.
