There are three prominent intelligence companies in the UK, one of which is the chief of the Government Communications Headquarters (GCHQ). The chief of this intelligence agency has expressed concerns regarding China and the digital Renminbi they are working on.
According to Sir Jeremy Fleming, the Chinese CBDC could be used for collecting information from users and could also be hypothetically used for filtering and controlling global transactions.
He warned of the negative impact the launch of the digital renminbi would have on global transactions. The chief of GCHQ said that if the central bank digital currency (CBDC) was also extended to other countries and they also begin to use it in the same way as locals, it could affect the health of the financial system negatively.
Fleming said that if the CBDC was wrongly implemented, it would provide a hostile country the ability to monitor transactions. He said that they would be able to have control over the transactions conducted using that digital currency.
The responsibility of the GCHQ include keeping the information of the United Kingdom secure and in case of an attack, coordinating the cyber defense. Fleming went on to say that China was also advertising their wallet for the digital renminbi as a payment method that could be used for the next Beijing Winter Olympic games.
This promotion was targeting both natives and foreigners and might push the latter into installing and then using the wallet in order to make payments for goods and services when they attend the event.
Fleming has expressed these worries because of the advancements and developments that have been made in China in the development of a digital currency in recent years. There are other countries that have also written essays about launching a CBDC, it is a fact that no country has made as much progress in their pilot program as China.
According to Fleming, China is making heavy investments in the development of this digital currency and this is primarily because it can have real influence on how the technology would work as well as the digital context. He said that it was time for them to work out how they would respond to it because it could eventually have an impact on their overall financial system and certainly not in a good way.
Fleming said that these kind of currencies did not have a proper framework globally. He added that Beijing hadn’t shown any intention of working with other countries regarding this issue. However, he said that collaboration and open trade between the two countries was undoubtedly important.
It is important to note that in May 2021, China implemented a ban on all crypto activities in the country, including crypto mining. The country has been running testing programs for its central bank digital currency (CBDC) since last year because the coronavirus pandemic showed the potential value of these digital currencies.
This crypto ban may likely a move to pave the way for its own digital currency in order to ensure it is widely adopted.