An Evaluation of Information Flows in Digital Euro Transactions Using Contextual Integrity Theory

Abstract

Privacy is regarded as a crucial factor in the development of Central Bank Digital Currency (CBDC), particularly for the digital euro in Europe. Currently, research on privacy in CBDC is scarce and focuses largely on its technical implementation or its influence on technology adoption. This work aims to act as a first step towards uncovering privacy norms in digital euro transactions for German citizens. To this end, we investigate privacy parameters and acceptable flows of information for digital euro transactions using an exploratory mixed-method approach based and contextual integrity theory. The privacy parameters, derived through the analysis of 21 qualitative interviews of experts and non-experts, are used to measure acceptability of various information flows in digital euro transactions for 129 respondents in a first quantitative evaluation. The results demonstrate the importance of acceptable and unacceptable recipients of transaction- and identity-related information as well as different transmission principles. The contributions of this work, the creation of a contextual integrity framework and the evaluation of first privacy norms in digital euro transactions, can be used by central banks and policy makers to design and implement CBDC that does not violate individuals’ privacy norms.