## Central Bank Digital Currency Data Use and Privacy Protection

_Fintech Notes, August 30, 2024_

## Source details

**Canonical URL:** [Central Bank Digital Currency Data Use and Privacy Protection](https://www.imf.org/en/publications/fintech-notes/issues/2024/08/30/central-bank-digital-currency-data-use-and-privacy-protection-554103)

## Other formats

- [Markdown version](/en/publications/fintech-notes/issues/2024/08/30/central-bank-digital-currency-data-use-and-privacy-protection-554103/index.md)
- [Structured JSON version](/en/publications/fintech-notes/issues/2024/08/30/central-bank-digital-currency-data-use-and-privacy-protection-554103/index.json)
- [Bundle manifest](/en/publications/fintech-notes/issues/2024/08/30/central-bank-digital-currency-data-use-and-privacy-protection-554103/bundle-manifest.json)

## Bibliographic details
- Authors: Kieran P Murphy, Tao Sun, Yong Sarah Zhou, Natsuki Tsuda, Nicolas Zhang, Victor Budau, Frankosiligi Solomon, Kathleen Kao, Morana Vucinic, Kristina Miggiani
- Published: August 30, 2024
- Series: Fintech Notes
- DOI: https://doi.org/10.5089/9798400286971.063

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### Overview
- 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.
- Scope: addresses retail CBDC; data access and privacy-preserving considerations in a wholesale environment are similar to those of traditional RTGS systems.
- Emphasis areas: institutional arrangements, data collection, access and storage policies, design choices, and technological solutions.
- Central insight: 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.

### Key findings
- Retail CBDC raises trade-offs between data use and privacy protection that require systematic frameworks and tools.
- Data access and privacy-preserving considerations for wholesale CBDC are akin to those for traditional RTGS systems.
- Institutional arrangements (transparency and accountability) materially affect the ability to use CBDC data while preserving privacy.
- Design choices and technology (including privacy-enhancing technologies) are central levers for reconciling data utility and privacy.

### Policy recommendations and tools
- Establish robust transparency and accountability arrangements to enable better use of CBDC data within chosen privacy preferences.
- Adopt sound policies on data collection, access, and storage that align with legal and institutional frameworks.
- Apply privacy-by-design principles in CBDC architecture to limit unnecessary data exposure.
- Consider privacy-enhancing technologies as part of the design toolkit to balance analytics needs and privacy protections.

### Design and technology considerations
- Privacy-by-design approaches are emphasized as a primary method to reconcile data use and privacy protection.
- Privacy-enhancing technologies should be judiciously adopted to support policy objectives while respecting privacy preferences.
- Design choices influence the scope of data collection, the granularity of accessible data, and the technical feasibility of privacy protections.

### Institutional arrangements and data governance
- Institutional arrangements determine accountability and transparency, which in turn affect public trust and permissible uses of CBDC data.
- Clear policies on data collection, access, and storage are necessary to operationalize privacy preferences and legal requirements.
- Central banks play a coordinating role in setting standards and practices consistent with national objectives for privacy and data use.

### Publication and metadata
- Authors: Kieran P Murphy, Tao Sun, Yong Sarah Zhou, Natsuki Tsuda, Nicolas Zhang, Victor Budau, Frankosiligi Solomon, Kathleen Kao, Morana Vucinic, Kristina Miggiani
- Date: August 30, 2024
- Series: Fintech Notes No 2024/004
- Issue: 004
- Volume: 2024
- Pages: 51
- DOI: https://doi.org/10.5089/9798400286971.063
- ISBN: 9798400286971
- ISSN: 2664-5912
- Subjects: Anti-money laundering and combating the financing of terrorism (AML/CFT), Central Bank digital currencies, Crime, Data processing, Digital financial services, Economic and financial statistics, Financial markets, Payment systems, Technology
- Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), CBDC, CBDC data, CBDC design, CBDC stakeholder, Central Bank digital currencies, central banks, data privacy, Data processing, data use, Digital financial services, Europe, Global, IMF Fintech Note 2024/004, Payment systems, privacy protection, technology, trust

*Central Bank Digital Currency Data Use and Privacy Protection, Fintech Notes 2024/004, IMF, August 30, 2024.*

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## Content in this bundle

- **Ftnea2024004**
  - [Ftnea2024004 (Markdown version)](/-/media/files/publications/ftn063/2024/english/ftnea2024004.pdf.md){rel="alternate" type="text/markdown"}
  - [Ftnea2024004 (PDF)](/-/media/files/publications/ftn063/2024/english/ftnea2024004.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fintech-notes/issues/2024/08/30/central-bank-digital-currency-data-use-and-privacy-protection-554103_