CBDC skepticism is also strong in Canada and England
The possibility of a US Central Bank (CBDC) digital currency has become a hot-button political issue in the US, but it seems that concerns about such a monetary instrument are also shared by US neighbors to the north in Canada , as well as among its predecessors across the pond in the UK.
Two studies published last week — one by hardware wallet maker Trezor and the other by financial news site WealthRocket — examined public attitudes toward CBDCs in the UK and Canada, respectively. They all asked different questions, but still came to similar conclusions.
People in Canada and the UK have clear reservations about the technology that central banks and governments around the world are exploring as an alternative to cash. A majority of Britons said they were concerned about UK authorities having control over people’s funds, while 39% of Canadians said losing control of their finances was a concern.
“There is a mistrust of government in so many countries around the world,” Steven Lubka, head of private clients and family offices at Swan Bitcoin, told me. Decrypt in an interview. “They don’t want to just hand over unilateral control of their money to their states.”
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CBDCs are digital tokens, similar to stablecoins. But CBDCs are maintained by their respective governments or central banks, rather than being issued by private companies on public networks like Cricle’s USDC or Tether’s USDT stablecoins.
Both surveys come as CBDC’s public comment periods in Canada and the UK come to an end. Responses to a consultation paper on CBDCs prepared by the Bank of England should be expected before the end of Friday. Consultations with Canada ended on June 19.
The studies follow research from the Cato Institute, a libertarian think tank, which found that only 16% of Americans support the adoption of a CBDC, with more push back among Republicans than among Democrats.
Canada’s concerns
In America, presidential candidate Robert F. Kennedy, Jr. pointed to Canada as a reason to support Bitcoin. He said he was inspired to support Bitcoin after the Canadian government attempted to quell protests against COVID-19 restrictions in the region by freezing protesters’ bank accounts.
Still 59% of the 1,500 Canadians investigated Through Wealth Rocket said they were willing to use CBDC for payments. 25% said they were not willing at all.
Canada’s central bank, the Bank of Canada, has no plans to issue a CBDC any time soon, but is exploring the technology in case the Canadian Parliament calls for it in the future, its spokeswoman said. website.
Canadian conservative Pierre Poilièvre said last April that CBDC is a no-go if he is ever elected prime minister, per Reuters. It is a position similar to that held by Republican presidential nominee and Florida Governor Ron DeSantis who promised that stop a CBDC will not be issued in the United States if he is elected president.
It is not surprising that conservative-minded politicians are more likely to criticize CBDC, said Lubka, who described it as a “paranoia wet dream” for people suspected of the government’s intentions.
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While understanding some of the concerns, Lubka thinks the likelihood of CBDCs in America and countries with other developed economies is somewhat exaggerated, pointing to financial intermediaries such as banks and fintechs being harmed.
“It’s just the ultimate embodiment of everything that has prodded and mobilized conservative concerns over the past several decades,” he said. “The only thing they’re wrong about is their probability of happening.”
Among the most common concerns of surveyed Canadians about a CBDC were the possibility of fraud, the risk of cyber-attacks and the possibility of cash being phased out. But rest assured, the Bank of Canada say that paper bills lead nowhere.
Notably, the least common concern among Canadians was a digital dollar rivaling cryptocurrencies and “challenging the rise” of digital assets. So it seems that Canadians either have some faith in the contents of their digital wallets or don’t care what happens to cryptocurrencies.
In terms of potential benefits, safety and convenience were the most important among Canadians. The BoC has indicated that a CBDC could help protect the stability of the Canadian economy from widespread use of cryptocurrency or CBDCs issued by other countries.
England’s turmoil
While British Prime Minister Rishi Sunak suggested that the Bank of England’s CBDC project was named “Britcoin” when he was Chancellor in 2021, the endeavor should not be confused with Satoshi Nakamoto’s namesake.
No consensus has been reached on whether the Bank of England will eventually pursue a CBDC – or even use blockchain technology – but the UK central bank and HM Treasury have been exploring the possibility since 2021.
The digital pound, examined in a recent Consultation document, is sometimes referred to as “digital pound,” the bank says. Still, Trezor’s research found that out of 1,000 Britons, 55% had heard of the digital pound.
This contrasts with the widespread awareness of CBDCs that has been circulating in crypto corners for years. Bitcoin OGs like Erik Vorhees have described CBDC as a “Orwellian spy surveillance nightmare”, while the American whistleblower Edward Snowden called them “cryptofascist currency.”
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“The knowledge gap is an order of magnitude larger” among the general public than within crypto when it comes to CBDCs, Lubka said. “I’ve been watching for years. That discussion has been going on for years.”
The Trezor survey found that people, while they may not be familiar with CBDC, are wary of the possible functions it could have.
When it comes to giving authorities control over their funds, 73% said this would be a concern. In addition, 67% of Britons were concerned about the idea that CBDCs could expire and money disappear if not spent.
Following DeSantis’ CBDC skepticism, who said a CBDC could be used to firearms62% of Brtis expressed concern about control over which goods and services can be paid for using the technology.
Trezor Bitcoin analyst Josef Tětek said in a statement that there is a substantial mismatch between people’s knowledge of Britcoin and how it could potentially affect people in the UK.
“It is clear that the vast majority of people are not comfortable with financial authorities having the kind of powers that a CBDC could grant them,” he said. “For the United Kingdom […] goes too far on the path to rollout, we need a comprehensive societal debate with ordinary people.”