Blockchain News

The Importance of Offline Usability for Privacy in the Proposed Digital Euro

In an exciting development, a draft law obtained by CoinDesk reveals that the proposed digital euro would prioritize offline usability from its very inception, ensuring the utmost privacy for its users. The draft text states that the digital euro should be available for both online and offline transactions right from the first issuance. This offline functionality aims to provide a level of privacy comparable to withdrawing banknotes from an ATM, as reported by CoinDesk.

The European Union has been actively considering the launch of a central bank digital currency (CBDC) and commenced an investigation phase in October 2021, set to conclude this October, according to the ECB’s website. On June 28, the European Commission plans to propose the version of the draft obtained by CoinDesk.

A survey conducted by the European Central Bank in 2021 confirmed that privacy stands as the most critical feature in the creation of a digital currency. This sentiment is echoed in the United States, where privacy has gained significant importance as well.

Recently, a Department of Treasury official stated the importance of exploring privacy in a potential retail CBDC. The official emphasized the need to consider privacy and anonymity preservation, along with the utilization of Privacy Enhancing Technologies (PETs) to ensure both transactional privacy and transparency. By leveraging these technologies, users’ trust in digital financial transactions can be reinforced, as explained by Graham Steele, the assistant secretary for financial institutions at the US Treasury.

Meanwhile, the global landscape shows promising progress in CBDC development. Currently, 11 countries have already launched their own CBDCs, and all G7 economies have entered the development stage, according to the Atlantic Council.

The proposed digital euro’s commitment to offline usability right from its initial launch represents a significant step toward safeguarding users’ privacy. By prioritizing privacy-enhancing features and aligning with global efforts in CBDC development, the European Union aims to create a digital currency that combines convenience, security, and privacy for its users. Stay tuned for the forthcoming proposal on June 28, as the EU takes another stride towards the future of digital finance.

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