"Central Bank Digital Currency: Considerations for Ensuring Privacy and Anonymity"

[Asia Economy Reporter Seo So-jeong] A suggestion has been made that when introducing central bank digital currency (CBDC), it is necessary to carefully consider measures to guarantee privacy and anonymity.

Seungjoo Choi and Youngsik Kim, professors at the Department of Economics, Seoul National University, Bongseop Kim, a doctoral student at the Department of Economics, Seoul National University, and Oik Kwon, associate researcher at the Bank of Korea's Monetary Policy Research Division, stated on the 29th in the report "Central Bank Digital Currency and Privacy: Randomized Survey Experiment" (BOK Economic Research) that "Since the potential acceptance of CBDC users may vary depending on the degree of anonymity and privacy protection of CBDC, a thorough prior review is necessary."

According to the report, the researchers conducted a randomized survey experiment to measure how the acceptance of CBDC by economic agents changes depending on the degree of anonymity and privacy protection of CBDC.

All survey participants were explained that it is a principle to leave CBDC transaction records to comply with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations, and were classified into six treatment groups with differences in the storage method of transaction information and the provision of information related to the benefits of using CBDC, and the differences in survey responses were analyzed.

The survey results showed that the responses indicating willingness to use CBDC ranged from 22% to 48% per question, and the higher the degree of privacy and anonymity protection of CBDC, the more the participants expressed willingness to use CBDC. In cases of separate storage or small-amount anonymous groups with high anonymity and privacy protection, the willingness to use CBDC increased compared to the combined storage group.

Additionally, when distinguishing by the nature of goods, the willingness to use CBDC increased when purchasing goods sensitive to privacy compared to purchasing goods not sensitive to privacy.

Furthermore, in cases where cash use with guaranteed anonymity is impossible (online transactions), the willingness to use CBDC significantly increased overall compared to cases where cash use is possible (offline transactions). Moreover, the group that received information on preventing the use of personal information showed increased willingness to use CBDC compared to the group that did not receive such information.

The Bank of Korea stated, "CBDC may weaken anonymity compared to cash, raising privacy protection as an important issue," and added, "To increase public acceptance of CBDC in the future, it is necessary to design CBDC to sufficiently guarantee privacy and anonymity, and actively promote and communicate."

This content was produced with the assistance of AI translation services.