A detailed analysis of digital currencies not for the faint-hearted

Judith Ratcliffe’s book, ‘Beyond the Hype’, casts an important light on the world of Central Bank Digital Currencies (CBDCs) and their potential adoption by governments across the world. Currently in the early adoption phase, only being implemented in countries with small economies and limited payments systems, the potential wide-scale implementation across G-7 countries is real.

It is claimed, by some central banks and governments, that CBDCs can resolve many issues that currently exist in the traditional banking sector, including: inefficiencies in transactions payments, financial exclusion, lack of competition in the payments sector, increasing lack of control over the delivery of money policy, and escalating payment fraud/financial crime. This book delivers a critical analysis on the benefits ‘claimed’ to be delivered and seeks to identify alternative motivating factors held by interested parties which explain some of the ‘real-drivers’ behind adoption.

Centred on the potential implications for citizens, Ratcliffe uses data privacy legislation (GDPR/DPA 2018) and the European Convention on Human Rights (ECHR) as a lens to reveal the impacts for data subjects and potential changes in the power-relationships between individuals and the state. This detailed and thoughtful analysis raises questions on whether CBDCs can genuinely operate whilst simultaneously ensuring that individuals maintain their 'right to respect for their private and family life'. 

This book is not for the faint-hearted. Detailed in its analysis and working on the assumption that the reader has a strong understanding of the existing global banking system, it identifies myriad potential legal/regulatory issues which CBDCs may create.

The scope of case-studies and enforcement actions covered by Ratcliffe is formidable, making the book a valuable resource for all practitioners in the financial services sector and data protection officers (DPOs) more generally. Indeed many of the issues around ‘privacy and consent’ map to all areas of data processing across all sectors of the economy. This makes this book an important tool for all privacy practitioners.

Posing as many questions as it delivers answers, the book asks if the price for adoption of CBDCs is too high and whether we should not blindly charge forward into this new digital space?

Kevin Parle is deputy chair of the Data Protection Forum