FRANKFURT, Germany—The European Central Bank (ECB) has released its first progress report on developing a central bank digital currency (CBDC).
According to Trading View, privacy provisions were a main focus, with the ECB promising pseudonymization, hashing functions, and encryption features as bulwarks against tracking individuals by transaction.
In addition, under the ECB’s CBDC framework, payment service providers cannot use consumer financial data for commercial services without first obtaining explicit consent from the individual who generated that financial data, the report stated.
Other Points Addressed
“Methods for conducting offline transactions were also outlined,” according to Trading View “The update briefly touched on providing support for offline transactions directly between parties without needing a third-party intermediary.
“These payments would be settled directly on the payment devices employed by users on smartphones and yet-to-be ‘smart cards’ that may be battery-powered or rely on bridging relays to synchronize transactions to the CBDC blockchain,” the report continued.