The world’s rapidly growing cryptocurrency market has increased the calls for central bank-backed digital coins, writes the Financial Times. Nearly 90 per cent of the world’s central banks have launched projects on issuing digital currencies according to the Bank for International Settlements. But this opens quite some ethical issues, particular with regards to privacy.
Unlike cryptocurrencies which operate on decentralised systems, central bank digital currencies would be issued, backed and controlled by domestic national banks, giving them the ability to pay money directly to individuals. That would allow central banks and national governments to monitor every transaction and keep a record of all money movements in their economies. […]
It could also shake up other economic relationships. Bank of England deputy governor Sir Jon Cunliffe recently said that a digital pound would allow parents to programme their children’s pocket money so that they are unable to buy sweets, illustrating the potential powers of the UK’s planned “britcoin”. [,,,]
“The dilemma society faces is: do we really want a central bank to know all about our financial lives?” said Eswar Prasad of Cornell University. “The great irony is that the revolution that bitcoin set off could be the end of [financial] privacy.”