The European Central Bank (ECB) has no interest in collecting users’ payment data or monetising data. A digital Euro would allow to pay without sharing their data with the third parties, other than what is required under regulations.

The Euro zone is still some years away from the electronic version of the cash. However, it aims to curbing the data-mining power on private payment apps.

Electronic cash can be made available as blockchain tokens. Here there is no privacy concern. The user has to produce the correct cryptographic key to spend the credit in the smart wallet. It makes digital currency akin to physical cash or Bitcoin. The onus of safety for the money is entirely on the individuals. However, digital currency can start life as IOUs in central bank ledger. These are akin to deposits, rather than cash. Monetary authority may not have the bandwidth to verify the identity of the individuals. The job would be outsourced to banks. They would know who is paying whom. Here there is risk of losing anonymity of cash. This can be corrected by separating identity from transactions. For small value transactions, an alternative could be an off-ledger system, with no details revealed to any third party.

Electronic cash can resemble the real thing if purchasing power could be made to reside on a piece of hardware. This the users have to safeguard.