GCHQ, the UK intelligence agency, is concerned about the implementation of the digital renminbi by China. Sir Jeremy Fleming, the chief of GCHQ, said that the current Chinese CBDC (central bank digital currency) system could be used to gather user information. He is concerned that hypothetically, global transactions can be controlled and filtered this way.
Chinese CBDC Developments Worry the UK Government
GCHQ chief warned about the negative consequences of Chinese CBDC on global financial transactions. Digital renminbi adoption, if moved to other countries, can affect the world financial system. If locals in other countries have to use it, the Chinese government will get hold of their data. If the implementation is not done with the right intention, it allows a hostile government entity to monitor transactions and gather data of its CBDC users.
China Going Ahead with Its Digital Renminbi
China plans to implement a digital renminbi wallet during the 2022 Winter Olympic Games in Beijing. Both locals and foreigners will be able to use it. Foreign users of this wallet will be able to use it to pay for products and services during their stay there. China has been moving fast in the digital currency field. Plans by other countries to launch their CBDC remain just an idea or in the development stage. On the other hand, China has advanced a lot in this matter. Fleming suspects China has moved forward more than others and is investing heavily in it.
The world is currently not prepared with a simple framework to control and manage such currencies on a global scale. There is no indication from Beijing that it plans to collaborate with other central banks in the digital currency field. Fleming remarked that it is important to ensure open trade and better collaboration between nations on this matter.