Central bank digital currencies (CBDCs): A new generation of digital cash
Guneet Kaur
University of Stirling
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?? CLAIM what is the topic / what is the contribution / what are we trying to do
Context and Background
We all constantly read”
"Governments refrain from utilizing CBDCs to settle their citizens”
But there’s a catch….!!!
Summary of the approach – not necessarily for presentation – more for ourselves
- define CDBC and motivations
- ?? One slide discussing the structure of CDBCs ??
- present positive and negative opinions : the debate is open and hot
- [our contribution/work] compartative report
- add more on opportunities and risks
- privacy
- ????
In general, central banks closely regulate and monitor the use of their liabilities, such as physical currency and reserves, to maintain control over monetary policy and ensure financial stability. As a result, central banks might utilize CBDCs data for:
Digital Pound vs. Digital Euro vs. Digital Yuan
| Digital Pound (dGBP) | Digital Euro (dEUR) | Digital Yuan (dRMB) |
Jurisdiction | UK | Cross-border | China |
Status | Design research phase | Preparation phase | Pilot phase |
Use case | Retail | Retail & wholesale | Retail & wholesale |
Anonymity | Not anonymous | Partially anonymous | Anonymity for small amounts |
Limits | Between £10,000 and £20,000 per individual as the appropriate balance between managing risks and supporting wide usability of the digital pound | Between €3,000 and €4,000 digital euros per capita. Limits apply to individuals, who may have only one account. Merchants would not have digital euro holdings but would accept and receive payments in digital euros. | The lowest level wallet is available for sign-up without a Chinese identity card, which has an RMB 5,000 daily and RMB 50,000 yearly spending limit. |
The imposition of transaction limits within central bank digital currencies echoes historical instances post-financial crises, [MAY BECOM|E A TITLE ?] where financial regulations tightened in response to systemic risks. However, these limits also raised concerns regarding privacy and financial autonomy.
For instance, following the 2008 global financial crisis, regulatory bodies increased oversight and imposed transaction limits on traditional financial instruments.
Source: The Guardian
In June 2015, amid the Greek financial crisis, the government imposed capital controls. These controls included limits on cash withdrawals from ATMs, restrictions on international transfers, and caps on the amount of money that could be taken out of the country.
For instance, Greek banks limited ATM withdrawals to €60 per day to prevent a bank run and capital flight, aiming to stabilize the banking system. These controls were gradually eased but remained in effect for an extended period, impacting citizens' access to their funds and international financial transactions.
Anonymity Levels Of Digital Pound, Digital Euro, and Digital Yuan Vs. Privacy acts
UK: Digital Pound
Privacy Act: Data Protection Act (DPA) 2018 and GDPR.
Violation Scenario: The non-anonymous nature of the digital pound might conflict with the DPA and GDPR. For instance, consider a scenario where a user's entire transaction history, devoid of anonymity, is tracked and stored without their explicit consent. This detailed and traceable financial record could potentially violate GDPR's principles on data minimization and the right to be forgotten, as users might not have adequate control over their financial data's storage and usage.
Anonymity Levels Of Digital Pound, Digital Euro, and Digital Yuan Vs. Privacy acts
Europe: Digital Euro
Privacy Act: General Data Protection Regulation (GDPR).
Violation Scenario: The partial anonymity of the digital euro might pose privacy concerns under GDPR. For example, if larger transactions lack anonymity, allowing extensive monitoring and profiling without explicit consent, it could potentially breach GDPR's provisions on data protection and individuals' right to object to automated processing, impacting users' control over their transactional data's use without their consent.
Source: The Sociable
Anonymity Levels Of Digital Pound, Digital Euro, and Digital Yuan Vs. Privacy acts
China: Digital Yuan
Privacy Act: Personal Information Protection Law (PIPL).
Violation Scenario: The limited anonymity for small transactions in the digital yuan might align with PIPL's provisions. However, if larger transactions face stringent monitoring without explicit consent, it could potentially breach individuals' privacy rights. Detailed tracking of significant transactions might conflict with PIPL's principles on data protection, compromising users' rights to financial privacy and control over their information.
Source: REITI
Criteria | CBDC | Cash (Paper Currency) | Bank Deposit | Third-Party Payment (Eg: Alipay) | Bitcoin |
Form | Digital | Physical | Digital | Digital | Digital |
Debtor | Central Bank | Holder | Commercial Bank | Third-Party Platform | Decentralized Network |
Credit Risk | Low | None | Low to None | Low | None |
Issuer | Central Bank | Government | Commercial Bank | Third-Party Platform | Decentralized Network |
Source of Value | Central Authority | Government | Bank | Third-Party Platform | Decentralized System |
Owner Anonymity | Controllable | Full | Low to None | Controllable | Variable |
CBDC vs. Cash vs. Bank Deposit Vs. Third-Party Payment Platform vs. Bitcoin
Think twice, act wise….!
SURCE OF DATA??? [here or where]
Which source of info/data have you used?
- an idea of the survey work that grounds the paper
- pointers for the interested reader
Particular interesting the source for yuan ?
EMAil ?