The CEO of the Cardano Foundation, Frederik Gregaard, recently discussed central bank digital currencies (CBDCs) with a group of UK legislators and stated that privacy isn’t the primary issue with CBDCs. The topic of discussion was the planned UK CBDC, also referred to as “Britcoin,” and Gregaard was anxious to emphasise that the discussion around CBDCs has to be more expansive and ambitious.
“The pound is already digital, so I don’t understand the discussion,” he said. “I’ve been here for 24 hours, and I have only been using my phone. I have not taken out a credit card. I’ve not been taking out cash at all. So you are quite digital already, you know?”
The true question with CBDCs, in Gregaard’s opinion, is not privacy, which can be dealt with cryptographically, but rather whether the technology can be accepted by all counterparties worldwide. He underlined the significance of expanding one’s perspective and not putting CBDCs’ potential to the side.
“I think you could do something amazing on a blockchain, which goes more towards bearer cash or a bearer asset—and preserving privacy. Or at least give you, as the user, the ability to control your privacy, which you don’t have today. And that’s where I’m coming from when I say privacy is not a problem. We can design it in such a way that you can own a lot of those data points yourself.”
Gregaard also advocated against the UK adopting the same regulations for CBDCs and cryptocurrencies as the EU or the US. He claimed that the UK should instead draw inspiration from nations like Singapore or Switzerland. He thinks that the UK has a great chance to construct something that distinguishes them from the competition, fosters growth, and produces jobs.
His remarks underline the necessity for a more ambitious and creative approach to CBDCs than merely imitating current digital payment systems. While privacy is still a major concern, there are other pressing problems that must be solved if CBDCs are to succeed.
Recently, Republican Congressman, Tom Emmer described CBDCs as a struggle for power between the government and its citizens. He is is worried about how a CBDC in the US might affect financial privacy, give governments access to personal spending data, or be used to “choke out politically unpopular activity.”