 Digitalization of economic activity has led to the proliferation of data and has transformed the way in which firms are able to accumulate and analyze data. Now data-driven firms of today's age are really able to unleash the potential of payments data. Payments data is especially valuable. Mashed with deep identification of consumer information, payments data enables firms to identify user preferences and analyze accurate trends, ultimately improving consumer experiences of goods and services. So it's clear that data can greatly enhance our economy. But to whose benefit? After all, payments data is derived from individuals' purchasing activity. This data comes directly at the sacrifice of consumer privacy. Here then, the relevant question is, are consumers better off? In order to understand this, we need to appreciate that data can also be a double-edged sword. If used to its fullest, a single firm could gain competitive edge and extend its market share. With greater market share, it gains control over more data. And with more data, this translates to greater competitive edge. Following this argument, data can lead to greater market concentration and even enable a firm to monopolize an industry. And once a monopoly is formed, it's really no longer clear whether a firm will relay the surplus generated from data back to consumers. In other words, consumers themselves whose privacy is breached just by making virtues using a digital payment also fail to reap the benefits of their own data. So in this paper co-authored with Rod Garrett at UCSB, we formalize this intuition in a theoretical environment. We show that introducing big data, in particular in a form of payments data, naturally creates a winner's takes all market. Furthermore, once that monopoly is formed, the monopoly makes great products and services based on this rich data, but also marks the prices up to the point where consumers reap zero profits from the surplus generated from their very own data. Now, from this, we might have the thought that a simple solution is to break apart the monopoly. And our analysis indicates it's not that simple. While it is possible in principle that a regulator could intervene and promote competition in the market by doing so, this comes at a steep cost of overall efficiency as data can become siloed across multiple firms. So at heart, a key issue is that firms benefit from the lack of digital alternative to cash. And as digital payments becomes more convenient relative to physical cash, consumers are left with no alternative to make payments without revealing personal information. The next step that we do in order to think more deeply about this issue is to consider the implications of introducing into the economy a low-cost privacy-preserving electronic payment method or a digital cash. What we show is that digital cash can achieve the best of both worlds. First, digital cash restores the ability for consumers to purchase goods digitally without revealing private information. And now firms have to entice consumers with lower prices in order to acquire this personal payment data. And so here digital cash can act as a bargaining tool for individual consumers to monetize their privacy. Second, digital cash also preserves the underlying market structure. And this means that to the extent that we find that data concentration is desirable from the prospective economies of scale, digital cash induces firms to share surplus with consumers whilst maintaining the gains from efficient use of data. Now as a final thought, we consider several factors that make central banks uniquely positioned to provide digital cash in the form of central bank digital currencies. First, there's immense monetary value in underlying payments data. And that means that a central bank that is not driven by maximizing profits may be better able to commit to preserving privacy relative to a private firm. Second, what we find is that the public value of digital cash far exceeds the private value of digital cash. And this is because digital cash may not necessarily be widely utilized. And yet it still functions as an important source of outside option for consumers. Now this makes digital cash a less profitable as a private venture, but nonetheless socially valuable as it allows for consumers to make privacy enhanced payments in a digital world.