EU to increase data privacy of digital coin users
2023.02.16 09:27
EU to increase data privacy of digital coin users
By Tiffany Smith
Budrigannews.com – The European Union is well-known for its conflicting views regarding privacy; on the one hand, it was the first nation in the world to establish stringent data protection laws. On the other hand, the anonymity standards of private cryptocurrencies are not present in its central bank digital currency (CBDC) project.
However, EU legislators took a significant step toward protecting citizens’ digital identities’ privacy last week. The industry, research, and energy committee’s amendments to the European digital identity framework (eID) included the zero-knowledge proof standard on February 9. In the committee, 55 votes were cast in favor of the most recent update, and the draft will now move on to the trilogue stage of negotiations.
Even though the most recent draft is still not available to the public, the press release states that EU citizens would have complete control over their data and the option to choose who and what to share it with:
“The new eID would allow citizens to identify and authenticate themselves online (via a European digital identity wallet) without having to resort to commercial providers, as is the case today – a practice that raised trust, security, and privacy concerns,” according to the proposal.
On Twitter, Circle’s senior director for EU government affairs, Jonas Fredriksen, made the following observation:
“As businesses develop innovative products and services that rely on zero-knowledge proofs and eID solutions, the proposal would facilitate the emergence of new business models and opportunities in the digital economy.”
Researchers have recently focused their attention on zero-knowledge proofs as a potential strategy for ensuring digital currency privacy and compliance with regulations.
The Mina Protocol’s operator, the San Francisco-based Mina Foundation, published a joint paper; Bank of German Hauck Aufhäuser Lampe; and the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability, and Trust demonstrated precisely how the zero proofs could be linked to Europe’s eIDAS electronic identity system.
However, that solution does not appeal to everyone. Balázs Némethi, CEO of Veri Labs and co-founder of kycDAO, stated in an article that it is recommended to rely solely on off-chain solutions when proofs alone are insufficient and personal information sharing between transaction participants is essential.
