Privacy concerns:
Privacy concerns about a digital pound include the potential for large amounts of data to be generated, allowing for widespread profiling and surveillance. However, developers argue that a digital pound could still offer more privacy than holding a bank account, but not as much as cash.
Tracking capabilities and privacy maintenance:
Similar to any form of digital currency, a digital pound will have some degree of tracking capabilities and increased surveillance. Privacy can be maintained by adding privacy-enhancing technologies and regulatory oversight.
Risk of bank runs:
Critics have warned that caps on Bitcoin holdings could prompt bank runs during times of economic uncertainty. Balanced holding caps, insurance schemes and regulatory oversight can prevent deposit outflows from commercial banks.
