Payments remaining a private matter emerged as the leading concern Europeans have about proposals by the European Central Bank (ECB) to introduce a digital Euro.

But two-in-five respondents in a consultation on the idea accepted digital euro transactions should be visible to either intermediaries or central bank to meet anti-money laundering and combating the financing of terrorism (AML/CFT) requirements.

The survey, which attracted 8,200 responses across Europe, found what participants most want from a digital Euro is privacy (with 43% putting that at the top of their list), followed by security (18%), usability across the euro area (11%), absence of additional costs (9%) and offline use (8%).

“Almost half of professionals (especially merchants) are also of the opinion that a degree of privacy would be necessary for a digital Euro to be adopted widely,” Eurosystem wrote in a report on the survey’s findings. Eurosystem links the European Central Bank (ECB) to EU member states’ central banks.

Christine Lagarde of the ECB said in November last year that the EU should explore a digital Euro if it is “cheaper, faster and more secure” for users, if it contributes to better autonomy for the Eurozone and facilitate easier cross-border payments. She said however that privacy and anti-money laundering concerns may mean it takes several years to implement.

Among professional respondents commenting on privacy, more than a quarter prefer an offline digital euro with cash-like features, the report added.

An exception to the general trend were Italy and Portugal where less than a quarter of citizen respondents cite privacy as the most important feature. Security is their main concern.

Security is also ranked as important among some professionals consulted, especially consumer associations and trade unions, as well as non-governmental organisations (NGOs) and the banking industry.

 Ideas mentioned by respondents to protect data were distributed ledger technology (DLT), encryption and authentication measures, such as one-time codes, passwords, e-signature, ID or physical recognition. 

When AML/CFT considerations are factored in, the report notes: “Almost one-in-ten citizen respondents support selective privacy, where lower-risk small payments under a threshold would remain fully private.

“About the same share suggest that, following the initial identification of a given user, all transactions should then be private … Only less than one-in-ten ask for anonymity, thereby making the application of AML/CFT requirements impossible.”

The report added: “Blockchain is considered by one-in-ten respondents as the most obvious solution to ensure compliance with know your customer (KYC) and AML/CFT rules while still providing a certain level of privacy.”

Only 10% of professionals, mostly in the banking industry, consider data transparency to be of upmost importance. A quarter support selective privacy under which transactions below a given amount would stay private, while 10% suggest spending limits on the value or number of transactions over a given timeframe to complement or substitute for selective privacy.

One-in-ten support full privacy of transactions, while “only a few” are in favour of full anonymity, the report said.

Ideas mentioned by respondents to protect data were distributed ledger technology (DLT), encryption and authentication measures, such as one-time codes, passwords, e-signature, ID or physical recognition.

Eurosystem said the early-stage public consultation has provided valuable input to its ongoing assessment of a possible digital Euro, with no decision pre-empted and further surveys possible.

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