In recent years, with the advent of digitalization, countries have begun to actively explore central bank digital currency (Central Bank Digital Currency, CBDC). CBDC can bring many benefits to the central government, such as improving cross-border payment efficiency, reducing costs, promoting financial inclusion, preventing illegal activities, maintaining monetary sovereignty, and responding to the challenges of cryptocurrency; therefore, including the Bank of England and cross-border payment leader Visa The Society for Worldwide Interbank Financial Telecommunication (SWIFT) and other institutions have announced plans to launch CBDC pilot programs in 2025. However, based on the completely transparent nature of blockchain technology, CBDC will make it possible for people’s whereabouts to be controlled by the government without any trace.

Will CBDC lead to no more privacy?

Susanna Copson, legal and policy specialist at Big Brother Watch, a British human rights advocacy group, pointed out that considering that the UK has never implemented CBDC, the government’s forced rollout will lead to potential risks to basic human rights such as privacy, equality, and freedom of speech.

"The Bank of England and the Treasury must prove the necessity of CBDC and indeed propose supporting measures that can protect the above rights."

Copson also emphasized that as the Bank of England rules out the option of an anonymous digital pound, a CBDC based on the completely transparent nature of the blockchain may become a "Digital Spycoin"; although the previous government promised to legislate to prohibit the use of Programmable digital currencies limit consumption, but it is clear that the new government will need to provide more guarantees.

Image source: X/@BigBrotherWatch Big Brother Watch’s concerns about CBDC

How does Big Brother Watch make people aware of CBDC?

Even though the Bank of England is consulting on the design of CBDC, the public’s understanding of CBDC is so limited that they are unable to participate in the discussion. Therefore, the current goal of Big Brother Watch is to increase public awareness of CBDC so that they can have a voice in future discussions on CBDC issues. On the other hand, Big Brother Watch also calls on the public to contact parliamentarians to launch an open forum on CBDC to ensure that the entire government can receive citizens’ opinions.

How should the UK promote CBDC?

Foreign media (Forbes) believes that the UK can learn from other countries that have implemented CBDC, such as China’s digital renminbi. China, which is based on an authoritarian system, still faces difficulties in the adoption of digital renminbi; factors including the dominance of private payment platforms, as well as public concerns about privacy and government, have resulted in a low share of digital renminbi and few active users. Dilemma.

Another case is the stymied rollout of Nigeria’s digital currency eNaira, with an adoption rate of less than 0.5%. Even though the government tried to strengthen the adoption of eNaira through policies such as restrictions on the use of cash and eNaira payment incentives, this move instead caused public dissatisfaction and even triggered protests. The failure of eNaira is mainly attributed to the low level of public trust in the government and insufficient infrastructure.

These two lessons show that CBDC must be implemented under the premise of establishing a transparency and accountability system in order to gain the trust of citizens. To avoid repeating the same mistakes, the UK should establish an independent agency to oversee information security and protect privacy rights to further prevent concerns about privacy violations.

Challenges CBDC will bring

The British House of Lords Economic Affairs Committee once described CBDC as "finding a solution to a problem," implying that the benefits of CBDC are overestimated by central banks and may bring financial stability and privacy risks.

Image source: X/@wideawake_media House of Lords Economic Affairs Committee questions the need for CBDC

According to Article 8 of the European Convention on Human Rights, the right to privacy is a fundamental right to protect an individual’s private life, family, residence and communications. This right is also enshrined in the Human Rights Act 1998 1998) into domestic law to protect people's personal information; based on the above characteristics, the right to privacy should receive the highest priority.

However, human rights to privacy have been continuously eroded, especially by technology giants such as Google and Meta that collect data in legal gray areas; what is even more disgusting is that these consortiums also use people's personal information to create commercial value. Their behavior is not only opaque and lacks effective supervision, but also floutes basic human rights. It is conceivable that the misuse of personal data by companies will make the British CBDC face more serious privacy challenges.

CBDC remains to be tested

As the 2025 CBDC pilot approaches, human rights groups such as Big Brother Watch are stepping up their calls for transparency. Although there are rumors that the pilot timetable may be delayed and the focus of CBDC development will be shifted to wholesale applications rather than retail applications, the Bank of England has not yet provided details of the policy.

The British CBDC pilot operation will likely reshape the financial and monetary system. Before that, the British government should create complete supporting measures and infrastructure for the protection of basic rights. Otherwise, the potential risks will outweigh the rewards; the government should also continue to enhance public awareness of CBDC's cognitive level, only with a two-way discussion platform, can CBDC be promoted in a form that is consistent with social consensus and citizens' interests.

Further reading
The modern economy is free! Well-known economics professor criticizes: CBDC and UBI will destroy the economy
BIS big survey! Central banks of various countries are beginning to plan digital currencies, but are there still big problems with CBDC?
Is the ECB CBDC report causing controversy? Analyst: "Privacy" is a wolf in sheep's clothing!