Study: "Digital currencies pose a danger to privacy"

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According to analytics from LondonAlan Turing Institute, central bank digital currencies give more people access to banking services, but are too intrusive on privacy.

Researchers at The Alan Turing Institute,studying the likely consequences of the introduction of central bank digital currencies into the economic life of society, they called for public discussion of privacy issues. They concluded that hasty adoption and release of CBDCs could dramatically reduce the already small boundaries of people's privacy.

CBDC, a digital form of currency issued bycentral bank, exists in many countries, including the UK, Singapore, South Africa and Canada. It is becoming more and more popular. Over the past couple of years, 14 countries have begun practical testing and integration of government currencies into their economic model, and more than 50 countries have announced that they are well advanced in the research and development stage:

“Widespread adoption of CBDC will dramatically increasethe volume of data generated by day-to-day transactions. This is dangerous because if we choose the wrong technology, we can end up with a state, even a democratic one, that knows all the ins and outs of preferences, income and transactions, and as a result will have even more power over your private life.”

According to researchers, before you beginTo the practical implementation of CBDC, three key questions need to be answered. Namely: what functions of the digital currency of central banks will contribute to expanding access to financial services; how a CBDC can provide a reasonable level of anonymity for accounts and transactions; How will the generated data be processed, stored and ultimately destroyed?

“Central bank digital currencies are capable ofbe financially inclusive, offering users convenient access to financial services and low transaction costs. However, this may entail a loss of confidentiality and an invasion of privacy that we do not believe should be compromised,” said Andrea Baronchelli, Token Economy Theme Lead at The Alan Turing Institute.

Recently, the Danish National Bank put
questioning the intentions of central banksdeveloped countries to introduce state cryptocurrencies. The Danish regulator emphasized that the government is not motivated to launch a digital version of the Danish krone, since the country is already considered a leader in the use of digital money.