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…