diff --git a/src/components/dashboard/Settings.tsx b/src/components/dashboard/Settings.tsx
index 07d70bea..9aba375c 100644
--- a/src/components/dashboard/Settings.tsx
+++ b/src/components/dashboard/Settings.tsx
@@ -9,6 +9,7 @@ import { ALERT_RULE_TYPE, ALERT_CHANNEL } from "../../lib/alerts";
 import PluginRegistryView from "./PluginRegistryView";
 import DataExport from "./DataExport";
 import LanguageSettings from "./LanguageSettings";
+import { revokeSentryConsent } from "../../utils/monitoring";
 
 const SESSION_API_KEY = 'stellar_custom_api_key';
 
@@ -404,6 +405,39 @@ export default function Settings() {
         </button>
       </div>
 
+      <div style={styles.section}>
+        <p style={styles.sectionTitle}>Privacy & Diagnostics</p>
+        <div style={styles.card}>
+          <div style={styles.row}>
+            <div>
+              <p style={styles.label}>Allow diagnostic data collection</p>
+              <p style={styles.description}>
+                Share crash reports and performance data to help improve Stellar Dev Dashboard.
+              </p>
+              <p style={{ ...styles.description, marginTop: "4px", fontSize: "11px", color: "var(--text-muted)" }}>
+                <strong>Data Retention Policy:</strong> Diagnostic data is anonymized and retained for a maximum of 30 days. It is used exclusively to improve application reliability.
+              </p>
+            </div>
+            <div style={{ display: 'flex', alignItems: 'center', gap: '8px' }}>
+              <input
+                type="checkbox"
+                checked={!!preferences.diagnosticsConsent}
+                onChange={(e) => {
+                  const consent = e.target.checked;
+                  setPreference('diagnosticsConsent', consent);
+                  if (!consent) {
+                    revokeSentryConsent();
+                  }
+                }}
+                style={{ width: '16px', height: '16px', cursor: 'pointer' }}
+                aria-label="Toggle diagnostics consent"
+              />
+              <span style={{ fontSize: '13px', fontWeight: 600 }}>{preferences.diagnosticsConsent ? 'Enabled' : 'Disabled'}</span>
+            </div>
+          </div>
+        </div>
+      </div>
+
       <div style={styles.section}>
         <p style={styles.sectionTitle}>Extensions</p>
         <div style={{ fontSize: '12px', color: 'var(--text-muted)', marginBottom: '10px' }}>
diff --git a/src/utils/__tests__/monitoring.consent.test.ts b/src/utils/__tests__/monitoring.consent.test.ts
new file mode 100644
index 00000000..28df113d
--- /dev/null
+++ b/src/utils/__tests__/monitoring.consent.test.ts
@@ -0,0 +1,74 @@
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
+import * as Sentry from '@sentry/react';
+import * as preferences from '../preferences';
+
+vi.mock('@sentry/react', () => ({
+  init: vi.fn(),
+  getClient: vi.fn(() => ({
+    close: vi.fn(),
+  })),
+  browserTracingIntegration: vi.fn(),
+  replayIntegration: vi.fn(),
+  breadcrumbsIntegration: vi.fn(),
+  withScope: vi.fn(),
+  captureException: vi.fn(),
+  setUser: vi.fn(),
+  startSpan: vi.fn(),
+  ErrorBoundary: vi.fn(),
+}));
+
+vi.mock('../preferences', () => ({
+  loadPreferences: vi.fn(),
+}));
+
+vi.mock('../logger', () => ({
+  createLogger: vi.fn(() => ({
+    info: vi.fn(),
+    warn: vi.fn(),
+    error: vi.fn(),
+  })),
+}));
+
+describe('monitoring Sentry consent', () => {
+  beforeEach(() => {
+    vi.resetModules();
+    vi.clearAllMocks();
+  });
+
+  afterEach(() => {
+    vi.restoreAllMocks();
+  });
+
+  it('initializes Sentry when diagnosticsConsent is true', async () => {
+    vi.mocked(preferences.loadPreferences).mockReturnValue({ diagnosticsConsent: true });
+    
+    const monitoring = await import('../monitoring');
+    monitoring.initMonitoring({ sentryDsn: 'http://test-dsn@sentry.io/1' });
+
+    expect(Sentry.init).toHaveBeenCalled();
+    const initArgs = vi.mocked(Sentry.init).mock.calls[0][0];
+    expect(initArgs?.dsn).toBe('http://test-dsn@sentry.io/1');
+  });
+
+  it('does not initialize Sentry when diagnosticsConsent is false (defaults to no consent)', async () => {
+    vi.mocked(preferences.loadPreferences).mockReturnValue({ diagnosticsConsent: false });
+    
+    const monitoring = await import('../monitoring');
+    monitoring.initMonitoring({ sentryDsn: 'http://test-dsn@sentry.io/1' });
+
+    expect(Sentry.init).not.toHaveBeenCalled();
+  });
+
+  it('closes Sentry client when consent is revoked', async () => {
+    vi.mocked(preferences.loadPreferences).mockReturnValue({ diagnosticsConsent: true });
+    
+    const monitoring = await import('../monitoring');
+    monitoring.revokeSentryConsent();
+
+    const getClient = vi.mocked(Sentry.getClient);
+    expect(getClient).toHaveBeenCalled();
+    
+    const client = getClient();
+    expect(client?.close).toHaveBeenCalledWith(2000);
+  });
+});
diff --git a/src/utils/monitoring.ts b/src/utils/monitoring.ts
index 570c9b6f..74ac1628 100644
--- a/src/utils/monitoring.ts
+++ b/src/utils/monitoring.ts
@@ -24,6 +24,7 @@ import {
 } from '../lib/errorReporting';
 import { initPerformanceMonitoring } from '../lib/performance';
 import { createLogger } from './logger';
+import { loadPreferences } from './preferences';
 
 export {
   collectHealthSnapshot,
@@ -65,6 +66,12 @@ let _initialised = false;
 // ─── Sentry init ──────────────────────────────────────────────────────────────
 
 function initialiseSentry(cfg: MonitoringConfig): void {
+  const prefs = loadPreferences();
+  if (prefs.diagnosticsConsent !== true) {
+    logger.info('Sentry initialization skipped: user has not granted diagnostics consent.');
+    return;
+  }
+
   if (!cfg.sentryDsn) {
     logger.warn('Sentry DSN not set – error tracking disabled.', { env: cfg.environment });
     return;
@@ -261,6 +268,15 @@ export function initMonitoring(userConfig: Partial<MonitoringConfig> = {}): void
 
   logger.info('Monitoring stack initialised', { env: cfg.environment });
 }
+
+export function revokeSentryConsent(): void {
+  logger.info('User revoked diagnostics consent, closing Sentry client.');
+  const client = Sentry.getClient();
+  if (client) {
+    client.close(2000); // 2 second flush then close
+  }
+}
+
 // ─── Sentry user context helpers ─────────────────────────────────────────────
 
 /**
@@ -402,4 +418,5 @@ export default {
   withSpan,
   captureError,
   SentryErrorBoundary,
+  revokeSentryConsent,
 };
diff --git a/src/utils/preferences.js b/src/utils/preferences.js
index 8d423ef1..d1b5b361 100644
--- a/src/utils/preferences.js
+++ b/src/utils/preferences.js
@@ -5,6 +5,7 @@ export const DEFAULT_PREFERENCES = {
   showAdvancedPanels: true,
   autoRefreshDashboard: true,
   defaultSearchScope: "all",
+  diagnosticsConsent: false,
 };
 
 export function loadPreferences() {