Finance Watch, a consumer lobby, has recently voiced concerns about privacy issues related to the upcoming digital euro. With the European Central Bank set to announce whether it will proceed with a digital euro, Finance Watch asserts that stronger privacy measures are crucial. This call for enhanced security comes amidst growing concerns that a digital euro could lack the anonymity of cash transactions, posing potential ‘Big Brother’ problems.
The European Union’s executive European Commission has already drafted a law to give legal backing to the digital euro. However, critics argue that it might not maintain the privacy offered by cash and might even replace it altogether. Despite these objections, Finance Watch maintains that a digital euro with strong data protection measures could reduce Europe’s reliance on dominant payment firms and Big Tech platforms, thereby preventing further market concentration.
A balance needs to be struck to prevent the misuse of the digital euro for money laundering purposes. As such, Finance Watch concedes that achieving full anonymity in digital transactions similar to cash might be challenging. The group pointed out that the proposed EU law currently offers greater privacy for offline use of a digital euro stored in a customer’s “wallet.”
Finance Watch has further suggested that higher levels of privacy and data protection should also apply to small, low-value online transactions. Meanwhile, EU financial services chief Mairead McGuinness cautioned against rushing approval of the draft law by EU states and the European Parliament. Similarly, the Bank of England has urged for a “national conversation” to allay public fears about government surveillance through a digital version of the pound.