Digital Euro: How anonymous payments would be possible

The European Data Protection Board (EDPB) has published an opinion on the digital Euro, focusing on its potential for offline, anonymous transactions mirroring the functionality of cash. This development is crucial as digital payment methods become increasingly prevalent, raising questions about financial privacy in the digital age. The European Central Bank (ECB) is promoting the digital Euro, aiming for a privacy level comparable to cash. The EDPB commissioned Professor Tibor Jager from the University of Wuppertal to investigate the technical possibilities for achieving anonymity with the digital Euro. Jager's findings suggest that anonymous offline digital Euro transactions are feasible. His research points to cryptographic tools that can ensure security against counterfeiting and maintain a high degree of anonymity, preventing third parties from tracking transactions. This development could significantly impact consumers by enabling private transactions even during power or network outages. While anonymous offline transactions present challenges like preventing "double spending," solutions like blind signatures are being explored. The goal is to allow individuals to make payments and transfer money without bank or payment service provider oversight, thereby enhancing financial privacy. The digital Euro is currently a central focus for EU institutions, with the ECB driving its technical implementation. Simultaneously, the legislative process is underway, with the Parliament and Council deliberating on the European Commission's proposal. The success of the digital Euro hinges on balancing its convenience with robust privacy measures.