The Information Commissioner's Office (ICO) has responded to the Bank of England and HM Treasury’s consultation on a Central Bank Digital Currency (CBDC). The ICO emphasises that high data protection standards must be enforced to ensure public trust and engagement with new products and services. Specifically, the ICO outlines granular responses for Article 5 of the UK General Data Protection Regulation (GDPR), which should inform the policy and technical design of any future CBDC. Trust in Payment Interface Providers (PIPs) and the security and confidentiality of personal data in the CBDC ecosystem will be vital to maintain public confidence. The ICO welcomes the consultation's emphasis on data protection and looks forward to further engagement with the Bank and HMT as they develop their CBDC policy positions.
In an article discussing the CBDC, Civil liberties and privacy campaign group Big Brother Watch (BBW) writes that the case for a centralised digital currency has not yet been fully made, but its introduction would "constitute a major change to our society and could come at a cost to our civil liberties." Among their concerns, BBW said, "placing the state at the heart of our personal finances like this would open a Pandora’s box of new surveillance opportunities," which would work by "recording financial transactions in a core ledger, and anyone with access to this ledger could see these transactions. Placed within an existing legal framework of counter-terror law, anti-money laundering regulations and investigatory powers law, generalised surveillance of our spending would be inevitable."
Meanwhile, CITY.A.M writes about the serious concerns and ramifications that a UK-introduced CBDC could have for privacy and equality. All transactions in this system will be recorded on a "core ledger", which can be accessed by permitted parties or hackers, generating vast amounts of data. The risks are too great to allow a complete overhaul of our financial systems and society without adequate protections. A privacy trade-off should not be accepted in the race to innovate.
An article in The Telegraph (£) reports more than 50,000 people have responded to the public consultation.
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