Biometrics is Key to Delivering a Digital Euro
When it comes to digital currencies, it’s now a question of “when”, rather than “if.” With China having already launched its digital Yuan, and the EU investigating the feasibility of creating a digital Euro, one lingering issue still needs to be addressed. If these new currencies are to be broadly accepted and trusted by the general public, then a robust digital authentication protocol must be applied.
The Need For Security
A series of significant security breaches has already seen companies dealing in cryptocurrencies lose staggering amounts of money, with the recent attack on Ethereum costing the business $600 million in stolen Ether currency .
A major issue surrounding cryptocurrencies such as Ether and Bitcoin is that they are not subject to the stringent financial regulation that traditional financial institutions must adhere to, and so should the worst happen, consumers are left with little recourse. A vastly more robust infrastructure is anticipated for CBDCs (Central Bank Digital Currencies) such as the proposed digital Euro. Cryptocurrencies as well as CBDCs, require assurances that consumer’s digital money and assets as well as their personal data always stay safe.
A Biometric Approach To Digital Authentication
Biometrics are an ideal way to prevent fraud, as they rely on verifying the unique biological markers each individual possesses, such as face, voice, or fingerprint. Currently, the most reliable biometric for authentication is the fingerprint and this technology also has the advantage of being both familiar to, and trusted by consumers, thanks to its use in smartphones and tablet devices.
By making use of biometrics, CBDCs can provide secure, convenient authentication process that sees a fingerprint sensor built into a payment card. Rather than having sensitive personal data stored online, all of the user’s unique verification information can be stored on the chip itself, preventing the risk of data theft or misuse, based on the same secure technology already scaling for biometric payment cards.
Success for the Early Adopters of Biometric Authentication
A number of financial institutions have already recognized the benefits of offering payment cards with built-in fingerprint sensors. BNP Paribas, a banking institution with 30 million retail banking customers across 72 countries in 5 continents  launched a full-scale biometric payment card featuring a fingerprint sensor in 2021.
Meanwhile, Swedish challenger bank Rocker has become the first in its country to offer payment cards with biometric authentication .Their customers enjoy advantages such as contactless without transaction limit, and no need to remember a PIN or password with consumer demand largely exceeded Rocker’s expectations.
Crypto Authentication Can Tame Digital Currencies
With the rigorous security afforded by biometric authentication, digital and cryptocurrencies could be made safe, opening up convenient banking for previously under-represented groups, and helping to reduce poverty levels in the process.