The executive board member of ECB, Fabio Panetta, has argued that a digital euro offers better privacy protections than privately issued stablecoins. The ECB official criticized private firms’ profit motive, emphasizing it is in their commercial interests to harvest masses of data on their users. In an interview with Financial Times, the board member said,” “We are not like private companies and have no commercial interest in storing, managing, or monetizing the data of users.”
ECB has carried out pilot testing for digital euro.
Fabio Panetta further confirmed that ECB has already carried out pilot testing of its digital euro in which no data was recorded outside the wallets of payer and payee. The official said, “If the central bank gets involved in digital payments, privacy is going to be better protected […] The payment will go through, but nobody in the payment chain would have access to all the information.” The ECB official’s comments appear intended to placate popular concerns regarding how data will be collected and handled when using CBDCs.
Privacy is a major concern among potential CBDC users.
Earlier, the ECB’s public consultation on the digital euro revealed that privacy of payments to be the highest-ranking concern among more than 8,000 respondents. The public consultation was conducted from October 2020 until January this year, revealing security and pan-European reach to be popular issues of contention regarding a digital euro. After the findings from the poll and public consultation were published in January, Panetta penned a letter to the chair of the Committee on Economic and Monetary Affairs (ECON) emphasizing “the protection of privacy” as a “key priority” moving forward “so that the digital euro can help maintain trust in payments in the digital age.”