The global race to develop a successful digital currency

The US, in its effort to catch up with China, has the choice to either emulate the surveillance, programmability and privacy capabilities of the digital yuan, or develop an open, permissionless CBDC that guarantees user privacy, writes Brian McGleenon

CBDCs are viewed by banking officials as a way to leverage advancements in the rapidly expanding digital asset market (Getty/iStock)

The world’s major powers are locked in a race to develop and issue a globally dominant central bank digital currency (CBDC), citing the need to increase the efficiency of payments and combat money laundering. However, opponents warn that government-backed digital currencies and freedom are incompatible.

One vocal opponent of the government’s answer to the innovations that spawned from the cryptocurrency sector is civil liberties attorney Marta Belcher, who tells me, “I have serious concerns about the privacy and civil liberties implications of CBDCs, they put governments at the centre of every transaction, giving them absolute visibility into financial transactions and the ability to revoke money”.