A former Apple executive believes the European Central Bank might just be paying lip service to the concept of privacy in relation to a digital euro.
In an April speech to the European Union Committee on Economic and Monetary Affairs, European Central Bank board member Fabio Panetta emphasized the importance of privacy in any potential future CBDC rollout.
Over 8,000 individuals and companies were polled during the ECB’s public consultation on the prospect of a digital euro. The most common concern expressed in response to the issuance of a central bank digital currency is privacy.
With 43 percent of respondents citing privacy as a key requirement, Panetta announced that the digital euro should meet certain expectations without compromising protection.
Other survey responses centered on the need for a digital euro to provide stable payments (18%), while others focused on cross-border payments within the European Union (11 percent ). Some respondents (9%) emphasized the importance of low fees and the opportunity to use the system even when it is offline (8 percent ).
“As I have already mentioned, privacy emerges as the most important feature of a digital euro. Protecting users’ personal data and ensuring a high level of confidentiality will therefore be a priority in our work,” said Panetta.
Indeed, the ECB has been researching privacy-enhancing strategies even before the idea of a digital euro was even conceived. According to preliminary studies, a digital framework may still be monitored for illegal activity while maintaining transparency and privacy.
However, while the ECB seems to be making all the right noises about a possible CBDC rollout, not everybody is convinced that the end result will be so positive.
Anne Fauvre-Willis, a former Apple product manager who is now the chief operating officer of Oasis Labs, stated that the EU has historically been receptive to the idea of customer privacy. However, if the digital euro is issued on a centralized basis, this would be meaningless.
“The EU has a strong track record in terms of customer privacy, but it’s still a centralized system,” Fauvre-Willis told Cointelegraph, adding, “Rather than allowing this through a centralized bank, why not allow a decentralized protocol to do this instead?”
If a digital euro were to be distributed on the Ethereum blockchain, it would have the same degree of decentralization and sovereignty as Ether (ETH) and any other token issued on the Ethereum blockchain.
However, it is highly unlikely that a central bank will hand over complete control of its money supply to a decentralized network.
“In regards to people adopting the digital euro, unfortunately I think ease will win over privacy alone,” said Fauvre-Willis.
“Privacy is a feature but it’s not enough to drive people on its own to change their behavior. Instead for those of us who really believe in privacy we have to simultaneously strive to make compelling and life changing products and as we do we need to put privacy at the center of what we make,” she added.
The ECB is also investigating the possibility of a digital euro, with a final decision anticipated by summer 2021.