Digital euro will weigh on privacy, AML, say ministers
A new digital euro will offer more privacy for small transactions – although complete anonymity is still apparently off the table, Coindesk wrote on Monday (April 4).
The officials announced it after a meeting of finance ministers from the European Union (EU) currency bloc.
There has been no formal decision on whether to issue a central bank digital currency (CBDC), although the EU is seeking to tie payment innovations to anti-money laundering rules ( AML), which will apply to the digital euro. as well as private cryptos.
Ministers said any new format for the euro should take privacy concerns into account, according to Irish Finance Minister Paschal Donohoe.
He said the new rules “will thwart the use of digital euros for unwarranted purposes”.
“A risk-based approach could be followed, allowing greater confidentiality for less risky and smaller transactions and vice versa,” said Donohoe, who chairs the ministerial meetings known as the Eurogroup.
According to the report, the European Commission will be consulted on any legislation that may be needed to support the new digital euro. However, the commission was warned that an unduly centralized system could facilitate espionage and constitute “troublesome” mass surveillance, the report notes.
Read more: With the AML proposal, the ECB gives the digital euro a head start on Bitcoin payments
PYMNTS wrote that EU lawmakers have also proposed an AML regime, which would help the digital euro in the payments industry.
The law would require the identification and screening of any crypto or stablecoin transaction, regardless of price.
On Wednesday, March 30, the European Central Bank (ECB) unveiled a proposal that would exempt users of its CBDC from AML checks for small transactions.
Fabio Panetta, a senior ECB board member leading crypto initiatives, said a digital euro “would offer people a level of privacy equal to or better than private digital solutions.”