“It’s about privacy…. If a French President believes that if he makes a small transaction to his mistress, that the CIA will know about it then it’s not a very sound basis on which to put in place an international payment system.” ~ Lord Mervyn King
Our Hero of the Week is Lord Mervyn King, Governor of the Bank of England from 2003 to 2013, for his clear stance on the futility and danger of a British version of central bank digital currencies (CBDCs), also known as the Britcoin.
Public pushback against plans to introduce a virtual alternative to cash in the UK has been huge, with more than 50,000 letters reaching Britain’s central bank in the City of London. It is obvious that the public’s greatest concern regarding digital money is over privacy and a possible end to the anonymity that cash affords.
Lord King also has warned of the consequences that CBDCs could create for commercial banks and the many risks of technical failure they will pose to commercial payments systems.
The Bank of England had already admitted that commercial banks would be hard-hit by a central-bank-backed digital pound, losing up to 20% of retail and commercial bank deposits.
But above all, Lord King has called for all future plans to introduce Britcoin to be put before parliament, and has asked why the government should be involved with payment systems rather than just regulating them.
It is uplifting to hear a central banker raise the appropriate concerns and pose the right questions. Lord King is a true economist and custodian of the wealth of the people.
Related:
More than 50,000 responses sent to Bank of England after digital currency consultation (The Telegraph, July 2023)
Ex-BoE governor Mervyn King calls Britcoin a ‘solution without a problem’ (FN Financial News, January 2022)
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