EDPB and EDPS Issue Joint Opinion on Digital Euro Regulations, Suggest Enhanced Data Protection
Summary:
On October 18, the European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) released a joint opinion on the "digital euro" regulations proposed by the European Commission in July 2023. They recommend enhancing personal data protection standards, clarifying the maximum amount verification process, and reviewing the necessity of a singular access point to user data. The necessity of fraud detection mechanisms and incorporation of "less intrusive measures" is also highlighted. A 'privacy threshold' for low-value daily transactions is suggested, below which transactions should not be tracked for AML/CFT. The ECB begins its preparation phase for the digital euro project.
Joint opinions on the regulation of the "digital euro," a proposal by the European Commission dated July 2023, have been released by the European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) on October 18th. The controllers had some suggestions in order to improve the privacy standards for the European central bank digital currency (CBDC). The EDPS and EDPB have indicated that there needs to be clarification on the verification process for the maximum amount of digital euro an individual account can hold.
The initial draft gave authorization to the European Central Bank (ECB) and the national central banks to have a singular contact to each user’s data. The two entities, EDPB and EDPS recommend an evaluation to ascertain the necessity and proportionality of having just one access point. They underscore the feasibility of using technological means to store these identifiers in a decentralized way.
The regulators noted missing foreseeability in the suggested fraudulent activity detection and deterrence mechanism of the CBDC. The EDPB and EDPS also emphasize the need to further clarify the FDPM’s necessity or consider options for "less intrusive measures" that respect data protection.
“Sturdy recommendations” by the EDPS and EDPB for creating a 'privacy limit' for online transactions were also put forward. Transactions falling below this threshold, both offline and online, would not be included in the process of tracking for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). The specific number for this threshold, however, was unspecified. Reference was only made to a limit concerning "low-value daily transactions.”
The ECB Governing Council has announced the "planning stage" for the digital euro initiative after a two-year exploratory phase. This planning phase, expected to run for two years, will be devoted to formulating regulations for the digital currency and selecting potential issuers.
Published At
10/20/2023 8:45:11 AM
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