Imagine Digital Euro Wallets as bank accounts managed by ECB. Similar to Open Banking, ECB will design an API and will provide access by licensing PSPs. ECB will only use and save wallet identifiers, it will not log identity of wallet owners. PSPs will have to verify the identity of wallet owners - at minimum they need to check that wallet owners are EU citizens at the time when the wallet is created. PSPs of transaction sender and receiver will need to communicate, because they need to obtain sender’s and receiver’s wallet ID in order to initiate and verify the payment. Based on this, various scenarios are possible. The PSPs may keep wallet owner’s personal information. They may also exchange and log the personal information as part of a transaction. ECB will possibly require logging of some information as part of money laundering precautions and PSP that don’t do that won’t get a licence and API access.
Apart from that, PSPs may wish to log information that goes beyond what they are legally required to. No doubt there will be initially lot of terrible consumer-unfriendly PSPs, mainly banks. Visa, MasterCard vor PayPal may also join as PSPs. But provided that ECB’s logging requirements aren’t too strict, privacy friendly PSPs will appear at some point.
Imagine Digital Euro Wallets as bank accounts managed by ECB. Similar to Open Banking, ECB will design an API and will provide access by licensing PSPs. ECB will only use and save wallet identifiers, it will not log identity of wallet owners. PSPs will have to verify the identity of wallet owners - at minimum they need to check that wallet owners are EU citizens at the time when the wallet is created. PSPs of transaction sender and receiver will need to communicate, because they need to obtain sender’s and receiver’s wallet ID in order to initiate and verify the payment. Based on this, various scenarios are possible. The PSPs may keep wallet owner’s personal information. They may also exchange and log the personal information as part of a transaction. ECB will possibly require logging of some information as part of money laundering precautions and PSP that don’t do that won’t get a licence and API access.
Apart from that, PSPs may wish to log information that goes beyond what they are legally required to. No doubt there will be initially lot of terrible consumer-unfriendly PSPs, mainly banks. Visa, MasterCard vor PayPal may also join as PSPs. But provided that ECB’s logging requirements aren’t too strict, privacy friendly PSPs will appear at some point.