According to the President of the ECB (European Central Bank), Christine Lagarde, the upcoming digital Euro will ensure the protection of users’ data. She added that the ECB would not sell that user’s data collected through payment for commercial purposes.
Digital Euro Will Protect the Data of Users
On Wednesday, while speaking at a meeting in Frankfurt, Christine Lagarde, the president of the ECB, talked about the upcoming CBDC. According to the president, the digital Euro will not serve commercial purposes.
Lagarde said the European bank would not sell the data of those who use the digital Euro to companies. She said it is the duty of the bank to ensure that such information is not exploited for other purposes.
The ECB president added that it is not the business of the central bank to sell user data. Additionally, she made reference to a survey conducted in January 2021.
The central bank conducted this survey while evaluating the possibility of launching a CBDC. From the report, privacy was the number one feature most users asked of the upcoming CBDC.
Several critics have accused central banks of using consumer data for commercial purposes. Moreover, privacy has become a major topic in recent times.
Lagarde Assures Citizens Data Protection
Several companies have come under fire for selling user data to other companies for commercial purposes. These companies use such data in their operations to offer customized adverts to users.
Meanwhile, Lagarde has assured users that the central bank will not allow such an occurrence. According to her, a CBDC is simply a banknote that has less anonymity.
However, unlike those entities that sell user data collected via payment, the CBDC will protect citizens’ data. On Tuesday, Jerome Powell, the Chairman of the US Federal Reserve, made similar comments.
Powell hammered on the need to protect user privacy. He stated that if the central bank decides to launch a digital Dollar, one major area of focus will be the protection of user data.
Us Federal Reserve Chairman Also Endorses Privacy Protection
Furthermore, the Chairman said privacy protection is among the four characteristics of a CBDC. The other three are interoperability, identity verification, and intermediation.
Unfortunately, the Federal Reserve has not yet decided to go on with its CBDC initiative. Countries like China have already begun using its CBDC on a large scale in transit vehicles and other purposes.
China also promised to protect the information of those who use the digital Yaun earlier this year. Meanwhile, the ECB is currently working on the prototype for its digital Euro.
Recently, the central bank picked five companies to help develop several potential use cases for the upcoming CBDC. The results of the evaluation will be available by March 2023.