CBDC Progress Stalls Over Privacy Concerns, Purpose Issues; Only 4 of 167 Live
Central bank digital currencies (CBDCs) appear to be further from widespread implementation than many might expect, with various obstacles, including concerns about privacy, holding back their progress. As cryptocurrencies have gained popularity, governments globally have proposed their own digital currencies in the form of CBDCs. China began its research on CBDCs as early as 2014. By May 2020, 42 countries had embarked on CBDC projects, and since then, many others have initiated research and development in this area. According to the Atlantic Council, 19 of the Group of 20 (G20) countries are now at advanced stages of developing their CBDCs.
Currently, according to CBDCTracker, 167 countries are engaged in research and development on national digital currencies. Out of these nations, only Jamaica, Zimbabwe, Nigeria, and the Bahamas have launched finalized products. Conversely, seven countries, such as the Philippines, Kenya, Denmark, Singapore, Ecuador, Curacao, and Finland, have discontinued their CBDC initiatives.
Privacy concerns are a significant hurdle for CBDCs. Some critics argue that central banks could potentially monitor consumer spending habits and even restrict citizens’ expenditures for political or ideological reasons. Harry Halpin, CEO of the privacy infrastructure firm Nym, emphasized substantial and justified privacy concerns surrounding CBDCs. He noted that China’s early adoption of CBDCs is part of a broader trend toward increased financial surveillance.
In the United Kingdom, a Trezor research report last year highlighted the public’s unease with the potential government misuse of CBDCs. The study revealed that 73% of respondents worried about officials having control over access to their funds. Two-thirds (67%) had concerns over the imposition of time conditions on money, while 62% were apprehensive about constraints on purchasing particular goods and services. 59% of respondents harbored fears about the potential to exclude specific individuals from financial services in the UK.
Lucien Bourdon, a Trezor analyst, pointed out that the sentiment expressed in the UK survey is shared globally. Bourdon believed that as public understanding of CBDCs grows, so does the unease. He suggested that governments might scale back their CBDC ambitions as implementing these could be prohibitively complex and costly, particularly when considering the increasing mainstream acceptance of Bitcoin and crypto stablecoins.
Prominent political figures, such as former U.S. President Donald Trump and Florida’s Republican Governor Ron DeSantis, have vowed never to permit the creation of a digital dollar. In May, the U.S. House of Representatives voted along bipartisan lines to push forward legislation blocking the Federal Reserve from establishing a CBDC. Halpin expressed a hope that CBDCs would never materialize and anticipated potential popular unrest should governments attempt to enforce them.
Julian Grigo, head of institutions at digital wallet provider Privacy Wallet Safe, attributed the diminishing interest in CBDCs to their “lack of purpose.” He observed that digital currencies do not address many issues in regions where robust digital payment infrastructures already exist. The complexity of gaining approval from multiple interest groups further complicates their implementation. For example, within the European context, obtaining the necessary approvals from all EU member countries and other relevant parties seems an insurmountable challenge.
Grigo suggested that the rise of stablecoins and the relatively unsuccessful launches of CBDCs underscore the need for governments to focus on regulating the stablecoin market rather than developing their own digital currencies. He argued that having some regulatory control over a privately issued stablecoin with global reach would be more advantageous than maintaining complete control over a largely unused CBDC.
Echoing Grigo’s sentiments, Halpin remarked that traditional banking systems and central banks tend to view cryptocurrencies with hostility and prefer CBDCs. He noted that the general population favored stablecoins like USDT (Tether), indicating a disconnect between the preferences of financial authorities and the public.
30 thoughts on “CBDC Progress Stalls Over Privacy Concerns, Purpose Issues; Only 4 of 167 Live”
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I had no idea China was so ahead in the CBDC game! 🀄
The Atlantic Council’s data on G20 countries and their CBDC projects is super insightful. 🌐
It’s intriguing to see former President Trump taking a strong stance against digital dollars. 🇺🇸
Honestly, if stablecoins work, why venture into the risky territory of CBDCs? Seems like a bad move on the government’s part.
The public unease in the UK makes it clear that more transparency is needed. 🌍
The stats in the UK report by Trezor are quite eye-opening. 73% worried about fund access is HUGE! 😳
An interesting point about governments possibly scaling back their CBDC ambitions.
I appreciate how detailed this article is, especially regarding the various international perspectives. 🌏
CBDCs sound like a disaster waiting to happen. 🛑 Too many privacy risks and too much potential for misuse by governments.
Loving the balanced perspective on the potential and pitfalls of CBDCs!
Grateful for the comprehensive insights provided on this complex subject. Great read! 📚
We’ve already got good digital payment methodswhy do we need CBDCs with all their potential problems? It doesn’t add up.
Interesting read! It’s fascinating to see how CBDCs are evolving around the globe.
The failure to get all EU members on board for CBDCs points to a severe implementation problem. 🚫 Just focus on what’s already working!
The fact that only a handful of countries have successfully launched CBDCs speaks volumes. Seems like more trouble than it’s worth.
CBDCs might end up being ‘digital handcuffs’ with all the control they give governments over our money. 🚨 No thanks! 🛑
This definitely gave me a new perspective on financial surveillance concerns with CBDCs.
The privacy concerns are pretty substantial. Kudos to the article for highlighting them.
Good to know about the stages of development in different countries. Knowledge is power! 📖💡
Honestly, the privacy invasion concerns with CBDCs are terrifying! Why would we trade our financial privacy for more government control? No thanks.
Couldn’t agree more with Grigo’s suggestion to regulate stablecoins instead of developing new CBDCs.
Great to hear an expert’s opinion on the potential complexity and cost of CBDCs.
The majority of people are worried about government misuse of CBDCs, and rightly so! 🚫 I’m definitely one of those concerned citizens. 🧐
I was unaware of how many complexities are involved in CBDC implementation. Thanks for shedding light on it.
It’s fascinating how stablecoins seem to be more favored compared to CBDCs among the public.
Quite the informative read about the global stance on digital currencies.
Julian Grigo’s points about lack of purpose are on point! 👌
Privacy issues are indeed a big concern . This article gives a great overview of why they’re stalling.
Awesome to see such a comprehensive rundown on CBDCs! Really enjoyed reading it. 📚
It’s clear that public sentiment plays a massive role in the future of CBDCs. 🌐