According to the CEO of the Cardano Foundation, privacy is not a big issue with CBDCs, and we all need to be a little more ambitious when thinking about their potential.
Central Bank Digital Currency (CBDC) has been the hottest new topic in crypto, banking and fintech in recent years. However, they have not been without controversy, especially among the crypto community.
Originally, cryptocurrencies were developed as a decentralized option to eliminate middlemen, increase transparency, and promote accountability. Unsurprisingly, many are apprehensive about the prospect of governments adopting comparable technology, which could increase surveillance and centralize financial power.
BeInCrypto spoke to Frederic Greengaard, CEO of the Cardano Foundation, a day after his appearance before the All Party Parliamentary Group on Crypto and Digital Assets on Wednesday, where he was invited to discuss CBDCs. The group, a voluntary association of MPs, scrutinizes the work of the UK government and regulators.
a bold agenda
However, his primary focus was the upcoming UK CBDC, or “Digital Pound”. The project is also known as “Britcoin”. The UK government has not yet committed to its implementation. Gregard wanted to emphasize that the current conversation around CBDCs needs to be broader and more ambitious.
He told BeInCrypto, “Yeah, I was provoking them dramatically and saying it was not a technical problem.” “It is a question of what the UK wants.”
On the official Bank of England website, the benefits of the digital pound seem almost indistinguishable from those offered by mobile banking and contactless payments. The UK is already one of the world leaders in digital payments. Cash is rarely used, and contactless has been the norm in retail transactions since at least the mid-2010s. Barclays made contactless capability the default for new debit cards in the UK in 2014. HSBC, NatWest and Lloyds Bank followed in 2015.
“The pound is already digital, so I don’t understand the discussion,” he said. “I’ve been here for 24 hours, and I’m only using my phone. I haven’t taken out a credit card. I haven’t been taking out cash at all. So you’re already pretty digital, you know?”
“To be honest, I think going down the rabbit hole is basically a waste of time.”
Privacy is not an issue with CBDC
“I think CBDCs have a different scope than what you’re talking about now with privacy. Privacy is not a problem. We can solve that cryptographically speaking very easily. The real problem here is whether you Can you do something that will actually be adopted? And not just by the population here, but by all of your counterparts around the world?
In its consultation paper, released last month, titled “To support trust and confidence”, the UK government said the digital pound would be subject to “rigorous standards of privacy and data protection”. The digital pound would be “at least as private as existing forms of digital money”.
Payment interface providers will verify users but anonymize personal data before sharing it with the central bank. As with other digital payments and bank accounts, the government and the central bank will not have access to users’ personal data, except in limited circumstances, except for law enforcement agencies.
big idea
“Let’s be very clear about what comparisons we make,” Greengard said. “Look at the data that is being collected on our smartphones right now. And when we use our debit cards, and when we are triangulated by the telco providers and all the CCTV cameras…. Grignard looks around with concern, pointing out the fact that London is one of the most monitored cities on the planet.
“I as a Swiss person, you know … it’s very, very strange to me. So I think we need to kind of talk about, what are we comparing? Right?”
“I think you can do something amazing on a blockchain that goes more towards bearer cash or bearer asset – and preserve privacy. Or at least give you, as the user, control over your privacy. provide capabilities that you don’t have today. And that’s where I’m coming from when I say privacy is not an issue. We can design it in a way that you can own a lot of those data points Are.
During the conversation, Grignard stressed the importance of thinking big, especially in a regulatory sense. While acknowledging the macroeconomic upheaval of Brexit, Greengaard believes the opposite is true. “The [EU] The discussions in Brussels are so colourful. It’s hard to satisfy in so many different directions.
UK should not follow EU or US
,[The UK] Capital has been the center of the market for a long time. You have a real opportunity to design something that really puts you on the scene and then creates jobs and growth. So why don’t you take it?” asked Greengard.
Last month, BeInCrypto revealed that the UK was actively choosing not to lead on crypto regulation. In Greengard’s view, this is the wrong strategy.
“If you’re sitting and waiting on jurisdictions that are not very clear and very successful at what they’re doing, that’s bad. So if you’re really getting inspired by the EU and the US right now, I think your data points are wrong. Where your data points should be is probably more towards Singapore or Switzerland,” Gregard said.
“The US and the EU are huge markets. They may be able to change the whole agenda. But they are not doing that right now.”
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