Central bank digital currency (“CBDC”) is a crucial FinTech development which aspires to

overhaul the current payment system. In the wake of the COVID-19 pandemic CBDCs' promises

to reduce personal contact, facilitate socially desirable use of money, and initiate more targeted

monetary measures have increased their popularity. In addition, CBDCs can potentially serve as a

tool to internationalize a sovereign’s currency. World central banks have gradually formulated a

consensus on structuring CBDCs, leaving the regulatory aspects of CBDCs deserving of more

attention. Among the regulatory issues related to CBDCs, observers often mentioned their

association with privacy concerns, but comprehensive studies on this aspect of CBDCs remain

limited.

This paper discusses the privacy concerns associated with CBDCs and attempts to introduce

discipline upon CBDCs and their issuing central banks. We first demonstrate the privacy

implications of CBDCs and highlight the risks of sovereigns misusing CBDCs to serve their

agendas. We then discuss, in a domestic context, several institutional designs that may address

privacy concerns and propose several disciplinary mechanisms that may enforce the privacy

protection laws against issuing central banks. We finally highlight the extraterritorial character of

modern privacy laws, which creates room for foreign privacy protection regulators to discipline

the CBDCs of other jurisdictions. Through this analysis, we argue that the application of modern

privacy laws and proper supporting mechanisms may effectively discipline CBDCs and their

issuing central banks