The proponents of decentralized blockchain technology and cryptocurrencies are normally the critics of CBDCs or the concept of the digital currencies that are controlled by governments. Nonetheless, CBDC FUD as well as other digital currency-related anxieties have additionally stemmed out of a stakeholders’ unexpected group.
The CBDCs and the unconvinced House of Lords committee
Regardless of hearing from the Treasury and the Bank of England’s officials, the Economic Affairs Committee of the United Kingdom is reported to be unconvinced regarding the issuance of a CBDC called Britcoin.
While discussing the long-ranging results as well as the potential hazards posed to several sectors, it was reportedly stated by the committee that such hazards take account of the state-based surveillance of the spending choices of people, the financial insecurity of people while transferring their funds to CBDCs in the times of economic stress, the advancement in the power of central bank without significant scrutiny, as well as the construction of a centralized failure point being targeted for criminal actors or hostile nation.
The Britcoin’s progress thus far
In the United Kingdom, the Digital Pound Foundation has played a vital role in gathering support to favor a CBDC. In addition to focusing on the requirement for a digital currency, the platform acknowledged in its 12th January statement that there are some hazards in the implementation of a CBDC nevertheless it also has the potential to revolutionize financial technology. It added that the latest types of digital money, on being broadly accepted by the common masses, would potentially drive the customer holdings out of the commercial banks.
The foundation moved on to mention that the funds deposited to commercial banks along with the other related processes would likely be influenced by the implementation of a CBDC. Nonetheless, it is noteworthy that the focus of the House of Lords committee was on the actors of the central bank, whereas the target of the Digital Pound Foundation was the commercial banks. The impact of the report proposed by the House of Lords Committee over a CBDC’s development in the United Kingdom is yet to be witnessed.
Apart from the House of Lords committee, Edward Snowden – the NSA whistleblower – has also voiced apprehension about CBDCs. He suggested that the CBDCs, in the future, might be utilized for controlling the residents.