Bank of England’s Fake “Privacy” Push Sparks Fears of Surveillance Currency

By Didi Rankovic – Reclaim The Net

The Bank of England (BoE) is moving forward with plans to create the UK’s central bank digital currency (CBDC) – the digital pound – and has teamed up with the MIT university to research “privacy-enhancing technologies” related to that future CBDC.

It is no coincidence that privacy is now being presented as the focus – the feedback on a consultation paper about the digital pound last year showed that privacy is the key concern. And yet, the way the BoE continues to address this vitally important issue amounts to little more than playing semantics.

Namely, the main argument the bank is making – as it promises that privacy will be preserved in a world where massive amounts of personal data end up, thanks to a CBDC, centralized and at the disposal of the authorities – is that “privacy is not anonymity.”

But in a scenario where a digital currency eventually replaces cash, it is clear that privacy cannot be guaranteed without at the same time guaranteeing anonymity, since regardless of how purely privacy-protecting any solution is, the mechanisms behind a CBDC crafted in this way will always provide means to identify the person behind a transaction.

However, anonymity is simply not on the cards, judging by the BoE-MIT paper, “Enhancing the Privacy of a Digital Pound.” All the more so since the central bank used the same “privacy not anonymity” argument before, cementing the impression that this is the line it intends to maintain – since, as stated in January, “given laws to fight financial crime, it (the digital pound) would not be anonymous.”

What that coming dystopian privacy nightmare would look like is spelled out in the report: payment and identity data will be collected and accessible, including to law enforcement, but that access will be legally regulated.

The citizens would not only have to trust the government not to abuse the vast new surveillance power it would gain over them, but also trust that the entity handling their data has bulletproof security against hacks, leaks, and every other plausible threat.

When it comes to law enforcement, they would be able to access data via providers that operate digital wallets, when using pseudonymization, or zero-knowledge proofs.

But – using these techniques, the paper notes, “increases the potential for a number of risks, including unintentional data leakage and intentional security breaches.”