Central Bank Digital Currency Data Use and Privacy Protection
Kieran A. Murphy, Tao Sun, Yong Sarah Zhou, Natsuki Tsuda, Nicolas Zhang, Victor Budau, Frankosiligi Solomon, Kathleen Kao, Morana Vucinic, Kristina Miggiani · Fintech Notes · 2024
This note offers a framework to help countries navigate, as well as tools to help them manage, the trade-offs between CBDC data use and privacy protection. It addresses retail CBDC, as data access and privacy-preserving considerations in a wholesale environment are similar to those of the traditional RTGS systems. It emphasizes the role of institutional arrangements, data collection, access and storage policies, design choices, and technological solutions. At a given level of preference for privacy, central banks can facilitate better use of CBDC data through robust transparency and accountability arrangements, sound policies, and judicious adoption of privacy-by-design approaches including the use of privacy-enhancing technologies.