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What about China?

The Chinese Communist Party (CCP) seeks to control the Chinese population in many aspects and has introduced a (notorious) Social Credit system. This is used to limit access to goods or services to individuals who don’t comply with all its values.

The CCP has just introduced a CBDC, having previously conducted trials in some cities (even giving some Digital ¥ away to encourage uptake). Starting this month (May), for the first time ever, thousands of workers in China will be paid their wages entirely in digital yuan. This system is said to have ‘controllable anonymity’. China currently has cash, mobile payment with Alipay or WeChat Pay and credit cards for transactions.

Starting this month (May), for the first time ever, thousands of workers in China will be paid their wages entirely in digital yuan.

Even with a global-style mixed economy of payment methods, the CCP still manages to control access to goods and services, so the CBDC itself is not the way this is enforced – instead a citizen’s personal ID is required (as well as their payment method) and this is checked against their Social Credit score. The Digital Covid Certificate on smartphones in Europe copied this authoritarian impulse. Note that the CCP justifies its restrictions to be for the general good of all.

Ominous precedents

We’ve seen in Trudeau’s Canada that legitimate protestors (and people making donations to them) have had their bank accounts frozen. PayPal has refused or halted services to some organisations whose views they do not like and has also threatened fines of up to $2,500! Some are unable to open bank accounts – as with some same-sex recovery charities or Laurence Fox’s Reclaim Party in the UK. These are astonishing breaches of normal citizen freedoms under the guise of ‘progressivism’ and they show that such oppressive measures do not need CBDCs.

Assurances about anonymity and not ‘programming’ (weaponising) the currency are too easily swept away.

However, CBDCs are more finely grained and can be programmed to track each purchase - not just specific ones like travel - for inspection and control. The BoE states that it won’t do this.

But the fear is that CBDCs make all of this tracking and denying service so much easier, as it would then be fully in the hands of government. Assurances about anonymity and not ‘programming’ (weaponising) the currency are too easily swept away. A US commentator pointed out that the anonymity barrier proposed by the US Federal Reserve is as “strong as a sheet of Kleenex”!

As a CBDC system is controlled by the country’s government, if the central ledger is not anonymous, then it’s possible for certain transactions (e.g., an airline ticket) to be blocked if your ‘Social Credit’ is too low: for example not being vaccinated, belonging to the wrong church, or holding the wrong opinions. This system could also be used to control ‘carbon’ rationing: if you have already bought your 100g of bacon, or litre of fuel, this week.

Digital currency and cryptocurrency

This monitoring and control of ‘digital currency’ is often associated with cryptocurrency technology, blockchains etc – but you don’t actually need that technology and the Chinese system may not use it – not least because it’s very expensive to manage. The BoE may not as well.

Some large organisations are shifting major holdings from US dollars to cryptocurrencies like Bitcoin.

The point of course is that cryptocurrency systems are designed to be outside any Government’s control and so not subject to its political machinations or privacy intrusions.
Some large organisations are shifting major holdings from US dollars to cryptocurrencies like Bitcoin. At the consumer level, you can even pay for parking or coffee in some areas via crypto exchange wallets.

A Christian perspective

Privacy. The dignity of each person and the associated personal responsibility before God are fundamental to a Christian worldview, so any incursions into an individual’s personal life needs to be fully justifiable, rather than with an assumption that the state has the right to interfere whenever it feels like it. On this principle, programmable CBDCs should be opposed. The BoE recognises this danger for they say they will preserve anonymity and not ‘Programme’.

Some may say that only criminals should fear scrutiny – but what if the watchers have ungodly intentions? We know that in the UK there was an army group (77 Brigade) that during Covid was checking social media for ‘aberrant’ views - many of which later proved to be closer to the truth than the ‘official’ narrative. The ‘for your safety’ excuse has been blown! So it does not seem to be reasonable to fully trust the Government or its agents, as they have been shown to misuse power. If government restricts freedoms more than is necessary, society loses much more than it gains. Surely Christian mercy should give people the benefit of the doubt.

If government restricts freedoms more than is necessary, society loses much more than it gains.

Wise budgeting. Christians Against Poverty (and others) have a money-management scheme that encourages clients to use bank accounts only where essential, using cash for more discretional items. They say that people spend 18% less when using cash. Electronic ‘cash’ would not have the same helpful effect. Credit cards and mobile payments are pushed because there is less purchase-resistance (even if later purchase-regret!). This implicit manipulation should not be encouraged.

Personal fruitfulness. God charges individuals to be fruitful in all ways and holds us (and not the state) responsible for how we use our ‘talents’. The basic premise must always be that deposited money belongs to the citizen, being held in trust by the bank – and most certainty is not the property of the bank (or state), being issued to you when the bank deems it appropriate. CDBCs, misused, encourage the latter view.

Sphere sovereignty. The Government may find it hard to get people to take up Digital-pound accounts, so may choose to pay Social Security benefits only into these accounts. They may later be tempted to think they then have the right to limit what the money is spent on (via ‘programming’). We may sympathise with this to some extent – but it’s the thin end of the wedge. And will the same thing happen with state pensions?

Our system of layered access to finance (accidental or judiciously planned) fits with a Christian's recognition of humankind’s fallibility and the need to partition power. Centralising must be resisted for all our good, as it places too much power in the hands of flawed people.

Centralising must be resisted for all our good, as it places too much power in the hands of flawed people.

Trust. There is the whole issue of honesty and integrity. The Technology Working Paper notes that ‘no final decision can be taken at this stage’ about the whole project (p.8) but it’s very hard to believe it won’t go ahead. It will no doubt cost vastly more than estimated and once in place measures will be needed to ensure it gets used – to justify its cost.

It’s tragic that we find it hard to believe that government servants will always act in the interests of all the people, but that is the position many find themselves in, particularly after the last three years.

Digital Magna Carta

Perhaps what we need, as a friend of mine suggested, is a digital-monetary ‘Magna Carta’, one which codifies our rights:

• Cash (banknotes) must always be available for those that wish to use it
• Cash must never be tracked (modern banknotes might make this possible).
• Retailers must accept cash for in-person transactions.
• Any CBDC should not undercut other payment options otherwise it will end up as the monopoly provider (i.e. a 2-4% transaction fee currently needs to be added for credit cards etc). This fee should cover the cost of the system in any case – not the taxpayer.
• Central banks are prohibited from retail banking operations.
• No financial institution has the right to withhold services based on a person or organisation’s opinions.
• Government organisations must never have routine access to personal/organisational financial information.
• Governments must allow pensions and benefits to be delivered to any bank of the recipient's choosing.

Any CBDC should not undercut other payment options otherwise it will end up as the monopoly provider

The Technology Working Paper

The early Church had much more to contend with - but ‘the ruler of the kings of the earth’ is ever present and where His reign is welcomed, and its precepts championed, freedom and flourishing abound. So as ‘a kingdom and priests’, we can get stuck in.

Hopefully the above information and analysis gives some food for thought on this huge topic. Maybe it’s time for us all to have an opinion. Thankfully, we can contribute to the decision Click here to do so (the consultation has been extended to 30th June 2023). You can find advice on completing the consultation here.

Read also these instructive articles: here and here.

Jon Sharp has worked as a software dev and latterly as a cultural apologist. He is founder of the website Knowing the Times