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- In the whitepaper, the Digital Euro Association puts a greater focus on privacy to gain user trust and allay concerns over government surveillance.
- Ripple proposes the use of blockchain technology to address privacy-related matters.
Although Ripple has been fighting a long and tiring battle with the U.S. Securities and Exchange Commission (SEC) for more than two years, it hasn’t stopped the company from working on different blockchain verticals.
In partnership with the Digital Euro Association (DEA), Ripple has published a whitepaper wherein it details the work of central banks worldwide to explore Central Bank Digital Currencies (CBDCs) wherein privacy has become an important consideration. The whitepaper from the DEA takes a combined approach towards CBDCS as well as the subject of privacy.
With global interest and growing exploration of #CBDCs, #privacy has become a crucial aspect to consider.
Learn more and read the DEA whitepaper with contributions from Ripple’s Head of Digital Currency Product & Solutions @moderndosh.https://t.co/CIvHUf8XPH
— Ripple (@Ripple) March 28, 2023
The DEA explains the importance of privacy and how it would impact the successful adoption, use, as well as implementation of Central Bank Digital Currencies (CBDCs). The goal of having better privacy will help in building user trust and alleviate the fears of government surveillance in a CBDC system.
Ripple Director of CBDC Product Management Anthony Ralphs is one of the key contributors sharing his expertise and research with the working group. Since different central banks have been indigenously working on their CBDCs, they address the issues of privacy from different angles. Thus, Ripple and the DEA decided to work together and set some minimum standards for CBDC privacy, on a global scale.
Leveraging Blockchain and Encryption Methods
To address the matters related to privacy in a CBDC system, Ripple proposes the use of blockchain technology. Commenting on this, a Ripple employee said:
One thing the paper explores is that CBDCs-and the blockchain technology they are built on-offer enhanced security and access management to help ensure privacy across the various use cases that are being implemented.
Furthermore, Ripple explains how various use cases and implementations will allow CBDCs to increase global, cross-border data flows in the future. Besides, to ensure greater privacy, Digital Euro Association (DEA) recommends strong encryption controls along with regular audits, stricter access controls, as well as a strict disciplinary regime for a data breach.
Note that the DEA works as an independent think tank and thus a voice for society. It’s completely unaffiliated with any European organization or the Eurosystem. Along with Ripple, some of the other members of the DEA include the German Central Bank (“Bundesbank”). RTGS.global, Circle, Ernst and Young, along with several other German banks.
Blockchain startups have been actively working on CBDC developments taking place worldwide. A few months ago, Ripple released its CBDC whitepaper stating that the XRP Ledger is capable of handling CBDC transactions for billions of people across the globe. Besides, Ripple also notes that by 2024, nearly 50% of the world’s population will use digital wallets for transactions.
