The UK Tax Reform Council, a non-profit organization, recently opposed the Bank of England’s move to create CBDCs. According to the council, this move will not profit the masses, as the government will get more rights over individuals’ finances.
UK Tax Reform Council Kicks Against CBDCs
The UK think tank has launched a campaign against central bank digital currencies of England that use surveillance measures. The United Kingdom Tax Reform Council has argued that CBDCs with intrusive surveillance capabilities could trespass on individual privacy and promote financial vulnerability.
The campaign comes at a time when several central banks worldwide are exploring the potential benefits of CBDCs – digital versions of fiat currencies. However, the organization has raised concerns about CBDCs that collect user data or employ blockchain-based technologies that could track and store every transaction.
As per the council, which includes monetary economist and cofounder of Fiscal Studies, John Chown, such a system could be vulnerable to hacks, data breaches, and abuse by government agencies or third-party entities.
Additionally, it argues that CBDCs with surveillance capabilities could enable governments to monitor individuals’ financial behavior, giving them more authority over matters regarding finance.
Bitcoin, A Rival Of CBDCs?
The United Kingdom Tax Reform Council has argued that Bitcoin (BTC) offers the same advantages as a central bank digital currency (CBDC). These include reduced costs for businesses and consumers, increased security, and greater privacy.
Per the council, Bitcoin already provides the same benefits as the CBDCs, such as improved financial inclusion, faster payment processing, and reduced transaction costs. So, the Tax Reform Council has encouraged the government to consider alternative CBDCs and explore other digital currencies such as Bitcoin.
The campaign has gained traction among experts and policymakers, who share similar concerns about CBDCs with surveillance measures. However, supporters of CBDCs argue that they could provide a more efficient, secure, and accessible payment system, particularly for the unbanked population.
The Digital Currency Claims
Currently, 114 countries are exploring CBDCs, says the Atlantic Council. England’s bank CBDCs claim to provide several benefits to global financial institutions. One of the main motivations it claims to offer is to increase financial inclusion.
Digital currencies could provide access to financial services for individuals who do not have a bank account. Additionally, digital currencies could reduce the costs and inefficiencies associated with physical cash by eliminating the need for printing, transportation, and storage.
Moreover, digital currencies could improve payment system efficiency and security by enabling real-time payments, reducing settlement times, and increasing transparency.
They could also enhance monetary policy by allowing for greater control over the money supply and better monitoring of economic activity. Furthermore, central banks may be exploring digital currencies to mitigate the potential risks from private cryptocurrencies by providing a safe, reliable, and regulated alternative.
But as the debate over CBDCs continues, it remains to be seen whether central banks will heed the think tank’s call for privacy-focused CBDCs or opt for the more surveillance-heavy model.
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