Chief of Government Communications Headquarters (GCHQ), which is one of three major intelligence agencies in the U.K. has expressed concern about China’s digital renminbi. Sir Jeremy Fleming suggested that Chinese CBDC might be used to obtain information about users, and possibly to monitor and filter international transactions.
UK Concerned About Chinese CBDC Advancements
One of the most important intelligence agencies in Britain, the Government Communications Headquarters (GCHQ), has expressed concern about the potential negative impact on global transactions that could be caused by the adoption of the digital renminbi. Sir Jeremy Fleming indicated that if the currency is extended to other countries and other players are using it like locals then it may have a detrimental effect on financial stability. Fleming declared:
Incorrectly applied, this gives hostile states the ability to spy on transactions. It gives them the ability . . . You will be able control what transactions are made on digital currencies.
GCHQ is charged with protecting information from the U.K. as well as coordinating the nation’s cyber defense in case an attack occurs.
China is Moving Forward
Fleming explained further that China promotes its digital renminbi currency wallet as an alternative payment method for the Beijing Winter Olympic Games. This is true for both natives and non-natives. It is possible that foreigners will be inspired to download and use the digital currency renminbi to pay for services and goods during the event.
China’s digital currency advancements over the past few years have caused concerns regarding Fleming shares. Although some countries have written essays on launching digital currencies at their central banks, others have done it before, China is the only country that has created a pilot. Fleming stressed:
China has stolen a march . . . [it’s] investing very heavily, overtly and covertly, and that’s because it is starting to exercise real influence on the way in which the rules of the road are going to operate in a technology and digital context. It is up to us to figure out how to respond to this.
Beijing is not willing to collaborate with countries on this issue, as there are still no global guidelines for managing these currencies. Fleming however emphasized the importance and cooperation between these two countries.
What do you think about Fleming’s concerns regarding the digital renminbi? Please leave your comments below.
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