The headlong rush to digital currency
Everybody’s doing it, but nobody’s talking about it …
By ‘everybody’, I mean governments. By ‘nobody’, I mean the public. Around half the world’s governments are now looking into introducing a central bank digital currency or CBCD, a digital version of fiat money which would be issued and regulated by the state.
Ten countries have launched a digital currency so far, with China expanding the pilot project it’s been running for the past two years. In India, the government aims to have a digital rupee in place by 2023, when the European Commission also plans to introduce legislation for a digital euro. In the US, a recent executive order from Biden has made research into a CBDC a priority, while in New York a pilot for a digital dollar has just begun.
At the same time, governments and organisations such as the European Union are pushing for digital IDs to become the main way citizens interact with the state and access services. Remember Lucy, whose day starts with making an appointment for mandatory vaccination and ends with showing a QR code to get into a bar? It will all be thanks to the digital wallet the EU has commissioned from Thales. Leading the digital ID race is India, which started the rollout of its biometric system Aadhaar in 2009. Now, with most of the country’s 1.3 billion population having exchanged finger prints, iris scans and photos for a 12-digital unique identification number, digital ID is effectively compulsory for participation in Indian life. But the system’s path has been fraught with controversy, with privacy breaches and people being denied access to services, in some cases costing lives.
There are suggestions that the two systems should become linked. At a recent meeting between the International Monetary Fund and the World Bank Groups, speakers agreed it would be good if CBDCs and digital ID were paired ‘as a package’. Where adopted, such measures would potentially affect every aspect of an individual’s life, right down to details that have hitherto been considered private and personal, creating a completely different kind of society.
Yet there’s an almost complete lack of public debate on the subject, at least of the official kind customarily led by politicians and institutions. The official commentary on CBCDs and digital ID by the media and think tanks rests on the assumption that such developments are inevitable, part of the progress towards a future that’s already written. It focuses on the benefits, citing the ‘inclusiveness’ and ‘resilience’ of a digital currency and the ‘convenience’ of digital ID; only passing references to privacy concerns leaven the sympathetic coverage of the ‘challenges’ facing governments as they strive to create the new systems. Meanwhile, certain sections of the public, independent media and civil liberties groups worry about the unprecedented potential for control afforded by this corporate-led digitalisation of our world. It’s as if two parallel discourses are being conducted by two sets of people with entirely different interests, with little or no dialogue between them.
The divide in the discourse about the digital reflects a very real split between institutions and people, one that has accentuated sharply over the past three years. On one side are governments, the finance sector and their allies in supra-national organisations; on the other are citizens, the individuals and ordinary people who make up civil society. And in a discourse dominated by the first, more powerful group, there’s an occlusion of the fundamental questions. Will these developments promote human flourishing? Are they in the interests of ordinary people? What do they mean for the rights and freedoms that have long been taken to be as central to a good society?
Such questions don’t even rise to the surface, so buried are they under a narrative of inevitability which suggests that modern life is so entirely subject to the impersonal forces of technology and progress that there is nothing to discuss.
Personally, I don’t buy this tale of inevitability for a moment. I don’t believe that we humans have no control over our way of life and the kinds of societies we create. And — full disclosure here — in the absence of a genuine public debate between governors and governed of the kind central to a functioning democracy, I’m on the side of the people. In what increasingly looks like a rigged game, I suspect we are being led in a direction that is not in our best interests.
So if things continue down this path, what might go wrong?
This is an extract from a longer essay. The full version can be found at: Ways of Seeing.
