On October 18, 2023, European data protection regulators shared their recommendations about the “digital euro,” a new digital currency proposed by the European Commission in July 2023. The aim is to improve how personal data is protected with this new currency.
The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) made several suggestions:
- Clearer Verification Process: They want a clearer process for verifying how much digital euro an individual can have. Currently, the European Central Bank and national banks can access user data through a single point. EDPB and EDPS want an assessment to decide if this single access point is necessary and fair. They also suggest using technology to store this data in a decentralized way.
- Fraud Prevention: The regulators found the fraud detection and prevention system for the digital euro lacking in predictability. They suggest providing more proof of why this system is necessary or looking at less invasive alternatives from a data protection perspective.
- Privacy Threshold for Small Transactions: EDPB and EDPS strongly recommend setting a “privacy threshold” for online transactions. Transactions below this threshold, both online and offline, wouldn’t be tracked for anti-money laundering and terrorism financing prevention. However, they didn’t specify the exact amount and only referred to “low-value daily transactions.”
In summary, the European data protection regulators are focusing on safeguarding personal data and privacy in the digital euro project. These recommendations are being discussed as the European Central Bank prepares for the next phase of this new digital currency’s development
