Privacy as institutional design: A legal-technological analysis of CBDC governance and compliance

CBDCs reconfigure the relationship between public money, institutional authority, and informational power. While privacy in CBDC systems is often seen as a technical issue of cryptography and compliance, this paper argues that it is primarily an institutional design challenge: who may access transactional data, under what legal authority, and subject to which constraints. Using Sweden’s e-Krona pilot and the emerging digital euro framework as comparative references, the analysis demonstrates how identical privacy-enhancing technologies can produce different outcomes depending on how central banks, intermediaries, and supervisory bodies allocate visibility, responsibility, and access. The paper also highlights the limitations of pilot environments, which cannot replicate behavioural diversity, fraud incentives, or the governance frictions typical of live monetary systems. Furthermore, it examines how cross-border legal fragmentation hampers the feasibility of privacy-preserving interoperability, even when technical standards seem compatible. The findings suggest that lasting privacy in CBDCs cannot rely solely on PETs; it requires institutional restraint, legally defined access rights, and governance structures capable of maintaining credible limits on informational power.