The Royal United Services Institute (RUSI) idenfied strong headwinds for central banks facing a range of conspiracy theories relating to their efforts to develop digital currencies (CBDCs).
The development of CBDCs faces some vocal and influential headwinds. But why is this? In this article, based on a review of literature and dives down various rabbit holes, RUSI researchers assess the various forms of opposition to CBDCs – ranging from the genuine to the self-serving, alarmist and fantastical. They then consider how the conspiracy theorists propose addressing their concerns could be addressed, before concluding with what those that are developing CBDCs might say in response – if they are to be believed.
The conspiracies confronting the development of CBDCs by central bankers fall into a range of increasingly extreme categories – from those rooted in potentially realistic concerns, to those that are highly dystopian and removed from reality. Despite this spectrum of opinion, these conspiracy theories share some common ground, central to which is the fear of losing privacy, freedom and individual autonomy.
Such fears in turn span a range of perspectives reaching as far as a belief that CBDCs are part of a desire to enforce the World Economic Forum’s (WEF) ‘Great Reset’ (an unfortunate and conspiracy-inspiring choice of name by the WEF) and to support the capitalist and elite takeover of global governance.
To get a better understanding of this array of conspiracies, it is helpful to consider them in three different categories: the seemingly concerned activists deeply worried about the potential effects of CBDCs on their lives; the political rabble-rousers, mainly encompassing US and European politicians among other high-profile opinion-formers; and the dystopians, who go beyond mere issues of government control and include a diverse array of boosters.
What response?
What do central banks and other financial operators have to say about all these accusations and dystopian visions of the future? Central bankers indeed understand that the introduction and idea of CBDCs might rattle people, and that they are worried about governmental surveillance.
However, awareness of the population’s concerns does not necessarily make life easier for central banks, because every word can be misinterpreted and used against them, as we have seen in the previous sections. Evelien Witlox, the programme manager for the digital euro at the European Central Bank, said that “These are people of our society, and we would like to take their concerns away – the problem is how we can do that”.
Mithra Sundberg, the head of the Swedish central bank’s CBDC project, has argued that “Neither the state nor the central bank have any interest in looking at how people pay for things”, and that “Privacy is an extremely important question when you’re talking about all types of digital monies”.
The Bank of England has likewise clarified that “A digital pound would have the same (or stronger) privacy protections as bank accounts, debit cards or cheques’ and that ‘[an] individual’s personal details would not be known by the Government or the Bank of England”.
In response to the petition of the UK Parallel Parliament about the programmable aspects of CBDCs, the UK government stated that “Neither the Bank of England nor the government would be able to program CBDC or restrict how money is spent. If there was end-user demand for programmability features, then any programmability features would be designed by the private sector wallets, and users would have the option to use them if they so wished’.
Thus, central banks are trying hard to ensure citizens’ trust and emphasise the benefits of CBDCs, such as facilitating the combating of terrorism financing, crime and tax evasion. One sentence, however – depending on the wording – can shake the whole foundation of trust, such as the statement by the Bank of England and the Treasury that a digital pound “would not be anonymous because the ability to identify and verify users is needed to prevent financial crime”. This pours petrol on the concern that, unlike physical money, users will indeed lose their privacy.
Where the banks are seeking to combat crime, which requires some form of user identification, the conspiracy theorists see this as confirmation of planned state surveillance and control. Central banks must, therefore, pay close attention to their communications to avoid making contradictory statements – or statements open to perverse interpretation – that reinforce the assumptions of conspiracy theorists.
Robert Holzmann, governor of the Austrian Central Bank, made clear that the narratives surrounding CBDCs are problematic because of their negativity: “What is still missing is a convincing storyline for the digital euro, something which we can put up in front of people”.