Berlin Group adopts working paper on digital central bank money

Commenting on this, the BfDI, Professor Ulrich Kelber, says: The advantages of digital payment will increasingly lead to the abandonment of the use of cash. Digital central bank money is becoming increasingly popular worldwide. The EU has also proposed the introduction of the digital euro. We now have the opportunity to set the course for data protection-compliant payment transactions. Compared to cash purchases, digital payment goes hand in hand with the possible loss of anonymity. If we want to make the digital euro a success, citizens must be able to trust that not all of their transactions will be monitored and even subjected to data retention.

 Central bank digital money is a central bank-backed digital currency. In contrast to the usual commercial bank money in digital payments, however, it is real central bank money, which can only be created by the central bank. It can therefore be regarded as a digital version of cash. Insufficient data protection compliance could give governments, central banks and financial institutions involved unprecedented access to the financial information of individuals and groups of individuals.

The working paper identifies the main risks and challenges associated with the introduction of central bank digital money and provides advice on how to implement this introduction in a privacy-compliant manner. The IWGDPT calls on all parties involved to take data protection risks into account when introducing digital central bank money and to develop countermeasures so that the basic properties of cash, which are supportive of data protection, are preserved as far as possible.