IMF Report Indicates CBDCs Could Be Used for State Surveillance of Wealth, Personal Data & Behavioral Patterns
by Tim Hinchcliffe | The Sociable
Programmable Central Bank Digital Currencies (CBDCs) could be used for state surveillance while posing risks to privacy and cybersecurity that could undermine trust in central bank money, according to an International Monetary Fund (IMF) policy brief.
The latest policy brief that “summarizes the main takeaways from a new wave” of chapters for the IMF’s CBDC Handbook warns that CBDCs could be perceived as an instrument for state surveillance where people’s transaction histories, demographics, and behavioral patterns are collected, processed, and stored.
“CBDC could be perceived as an instrument for state surveillance. Some may worry that the government or the central bank could use it to control or restrict payments users can make with CBDC, thereby undermining public trust in central bank money. This can be a particular concern in countries with severe governance and corruption vulnerabilities”
IMF, “Central Bank Digital Currency: Progress And Further Considerations,” November 2024
According to the brief, “Central Bank Digital Currency: Progress And Further Considerations:”
“CBDC, as a digital form of central bank money, may allow for a ‘digital trail’—data—to be accessed, collected, processed and stored.
“In contrast to cash, CBDC could be designed to potentially include a wealth of personal data encapsulating transaction histories, user demographics, and behavioral patterns.
“Personal data could establish a link between counterparty identities and transactions.”
“CBDC, as a digital form of central bank money, may allow for a ‘digital trail’—data—to be accessed, collected, processed and stored“
IMF, “Central Bank Digital Currency: Progress And Further Considerations,” November 2024
“Is it [digital euro] going to be as private as cash? No. A digital currency will never be as anonymous and as protecting of privacy in many respects as cash, which is why cash will always be around”: Christine Lagarde, BIS Innovation Summit, March 2023 #CBDC pic.twitter.com/BLMVOPax6a
— Tim Hinchliffe (@TimHinchliffe) April 11, 2023
A CBDC will never be as a private or anonymous as cash, according to European Central Bank president Christine Lagarde.
One of the reasons is that because in order for a CBDC to operate, everyone must have some form of digital identity. Read Full Article >