Economic Secretary to the Treasury Andrew Griffith sought to get ahead of privacy concerns about the government's ability to track individual spending if a digital pound is launched.
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The government has no intention of making the digital pound a tool of a surveillance state, a U.K. minister has told a parliamentary hearing.
While emphasizing that a retail-focused central bank digital currency (CBDC) is still an "if" not a "when" question in Britain, Economic Secretary to the Treasury Andrew Griffith said very clearly that any push for a digital pound would make individual privacy a high priority. The MP added:
"If we do collectively decide to proceed with that, it will be a platform model that wouldn't allow the government to know individual transaction data."
Such a model, he said, envisages the government having "anonymized knowledge of individual providers" — probably banks — and those providers in turn providing digital wallets to consumers.
That's the limit to which information would sit other than as necessary to allow things like anti-money-laundering tools like those already in use. Griffith added:
"The government takes that extremely seriously and we would not be pursuing something that … our people would characterize as a surveillance state."
An Issue Everywhere
More than 100 countries are at some stage of investigating, testing or creating CBDCs — but China and Nigeria are the only major economies that actually have one in circulation.
India and Turkey are both aiming to launch CBDCs this year, and the European Central Bank has been strongly advocating for a digital euro.
The U.S. is at the undecided and not especially eager stage, although testing is ongoing and support is growing, in part to not be left behind by China's digital yuan and other CBDCs. That's something Griffith said was a concern for the U.K. as well.
Even in China, however, privacy is a big concern, with the government working to reassure people that their every purchase will not be tracked — a process it often characterized as "controllable anonymity."
In October, the South China Morning Post reported that the People's Bank of China's Digital Currency Research Institute, which is spearheading the digital yuan project, was moving more aggressively to "allay public concerns about data protection and privacy in using the digital yuan' and was "vowing to implement clear laws concerning the monitoring of digital wallets."
Transactions would only be monitored when there is a reason to suspect money laundering, terrorist financing or tax evasion, according to Mu Changchun, head of the DCRI.
"We need to ensure there is a limited scope for user information to be used," he said. Which is a concern in the land of the social credit score.
