When it comes to CBDCs, one of the most common public worries is the possibility of privacy invasion. The European Central Bank (ECB) has released a presentation addressing this topic, stating that the Eurosystem should only have access to the bare minimum of transaction data. User anonymity is not the desired design option. Three Alternatives to Privacy In response to EU citizens’ concerns about the privacy implications of a CBDC, the ECB’s presentation presents three distinct privacy solutions for the digital currency that can be implemented. To begin with, the existing baseline scenario, which is identical to digital transactions through private banks, allows digital euro intermediaries such as banks to access transaction data while the ECB does not. According to the presentation, transparency is necessary for “anti-money laundering and counter-terrorist financing (AML & CFT).” The other possibilities have been branded as the “preferred” course for the bank’s digital money. For low-value/low-risk payments, one might allow for more anonymity, implying “simplified checks” on the transactions. On the other hand, high-value prices will be subject to routine restrictions. The text did not define what income level qualified for this type of payout. The last option provides anonymity, as transactions and balances are not visible to intermediaries and the central bank. According to the bank, this offline alternative may only be acc...
