Payments made by a digital version of the U.K. pound will be private but with certain conditions, according to the Bank of England’s deputy governor.
Privacy and anonymity are two different things, Jon Cunliffe said during POLITICO’s Global Tech Day — a principle that’s enshrined in today’s payment systems and which will be no different for central bank-backed digital currencies (CBDC).
“Every transaction you make with your credit card, with your phone, using your bank account, is recorded and stored,” he said. “Under certain circumstances, the authorities, law enforcement, tax … can have access to the records of all of your transactions in your bank accounts.”
“For a CBDC, we would completely respect that balance,” he continued. “Complete anonymity has with it the potential for social harms, tax evasions, crime, terrorist financing,”
The central bank is currently collecting public comments on how to design virtual pound coins and banknotes that can settle payments in seconds.
Some 50,000 complete responses have arrived and Cunliffe is expecting plenty of views on safeguarding payment privacy, amid concerns that a digital pound could lead to government snooping.
“The Bank of England would not see any individual identifiable customer data,” he said. “But the wallet … it would store all that information in the way that banks store it now and that would be available to for example law enforcement under certain circumstances.”