The European Central Bank, in a recent announcement, has stated that the digital version of the euro would protect the privacy of consumers as well as shield member states in the monetary union from the loss of economic sovereignty that occurs due to the growing use of European Central Bank or digital currencies created by governments. If the central bank steps into the digital payments sector, privacy is going to be better protected.
Privacy is one of the major concerns that emerge from gauging public interest in European Central Bank digital currency and cryptocurrency. Still, developers of a potential ECB digital currency have tested ways to separate the identity of participants in a transaction. The payment will go through, but nobody in the payment chain would have access to all the information.
Addressing a key political issue around digital currencies, ECB said that there is the potential threat from others issuing a digital means of payment. If people do want to pay digitally and the banks do not offer them a digital means of payment, somebody else would do that. This will result in data breaches. To stop this, ECB is stepping into the digital currency sector.