Stablecoins pose greater privacy risk than digital euro, says Lagarde

Quick Take

  • Central banks have no interest in using or monetizing consumer data, the President of the European Central Bank said on a BIS Summit panel.
  • Big tech companies offering stablecoins would be a greater privacy risk for consumers, Lagarde said.

Central banks have no interest in using consumer personal data when offering digital cash, President of the European Central Bank Christine Lagarde said on a Bank for International Settlements Summit panel.

Big tech companies or firms offering stablecoins have a greater use for collecting consumer data and should be considered a bigger privacy risk, she argued. 

“A digital currency will never be as anonymous and respecting of privacy as cash,” she said, indicating that the ECB is working on a so-called “Cash Plus” option for a central bank-backed digital euro that would emulate the privacy of cash as closely as possible.

Commercial banks would be intermediaries making CBDCs like the digital euro accessible to consumers, handling consumer data, anti-money laundering and know-your-customer requirements. Collecting and monetizing consumer data is “not in the interest and business of a central bank,” said Lagarde.

Privacy is one of the biggest concerns for European citizens when it comes to the digital euro, ECB surveys have shown. The central bank chief has attempted to quell privacy concerns in the past, assuring Europeans that a digital euro would not be used for commercial purposes.


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Investigation phase for digital euro

The EU’s digital euro project is currently in its investigation phase, as financial institutions the central bank has partnered with help to build prototypes. A decision on whether to implement a euro CBDC is anticipated in October. 

Sooner on the horizon, a European Commission proposal on a digital euro is expected in May this year. The ECB’s executive board member Fabio Panetta previously told policymakers that they will bear the details on privacy in their legislative proposal.

“It will be for you as co-legislators to decide on the balance between privacy and other important public policy objectives,” he said in January.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Inbar is a reporter covering crypto policy and regulation with a focus on Europe. Before The Block, she worked with several publications in Brussels including The Parliament Magazine and Are We Europe. Inbar holds a bachelor's degree in international relations from University College Utrecht and a master's degree in international politics from KU Leuven.


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