Feb 17, 2023
EU Lawmakers Embrace Privacy with Zero-Knowledge Proofs
The European Union’s attitude towards privacy has been a contentious issue for many years. On the one hand, the EU was the first region to impose strict data protection regulations. On the other, the Central Bank Digital Currency (CBDC) project has been criticized for not providing anonymity standards similar to those of private cryptocurrencies. Last week, the Industry, Research and Energy Committee of the EU took a major step forward in the digital identity space by voting 55 to 8 to include the standard of zero-knowledge proofs in the amendments to the European digital identity framework (eID).
The new eID would grant citizens the power to decide which information they want to share and with whom. This would mean that they would no longer have to resort to commercial providers, which has raised trust, security and privacy concerns. Jonas Fredriksen, the senior director for EU government affairs at Circle, commented on Twitter that the new framework would open up new business opportunities in the digital economy, as companies can develop products and services that rely on zero-knowledge proofs and eID solutions.
Zero-knowledge proofs have been gaining attention recently as a possible solution to ensure regulatory compliance and privacy in digital currencies. A joint paper by the Mina Foundation, Hauck Aufhäuser Lampe bank, and the Interdisciplinary Centre for Security, Reliability and Trust of the University of Luxembourg explored how zero-knowledge proofs could be connected to Europe’s eIDAS electronic identity system.
However, some are still unconvinced by this solution. Balázs Némethi, the CEO of Veri Labs and co-founder of kycDAO, argued that when proofs are not enough and personal information must be shared between participants in a transaction, relying only on off-chain solutions is the best way forward.
The implications of the EU’s decision to embrace zero-knowledge proofs are far-reaching. This could be a major boost for the web3 space, as it will enable the development of innovative NFT marketing solutions, NFT promotion services, and even NFT marketing agencies. Furthermore, it could open up new opportunities for selling NFTs and using Twitter NFT marketing strategies.
The trilogue phase of negotiations is the next step in the process, and the draft will be made available to the public once it has been approved. In the meantime, the web3 space is sure to be watching closely, as this could be the first step towards a more secure and private digital economy.
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