SWISS AMERICA FINANCIAL FREEDOM REPORT

CBDC Privacy Concerns

The implementation of a central bank digital currency (CBDC) raises significant privacy concerns that need to be addressed. Some of the biggest privacy issues associated with CBDCs include:

1. Complete Transaction Tracking: CBDCs, being digital currencies controlled by central banks, can enable governments and central authorities to have comprehensive visibility into every transaction conducted using the currency. This level of surveillance raises concerns about financial privacy and the potential for governments or authorities to monitor and record individuals' financial activities without their consent. 2. Individual Financial Data Collection: CBDCs may require individuals to provide extensive personal information to open and maintain digital wallets. This requirement could involve submitting identification documents, addresses, employment details, and more. The collection and storage of such sensitive data by central authorities raise concerns about how this information could be used, shared, or potentially misused, leading to breaches of privacy or identity theft. 3. Data Security and Protection: With CBDCs relying on digital infrastructure, the security of data becomes paramount. Individuals' financial information stored in digital wallets could be vulnerable to cyber attacks, hacking attempts, or data breaches. A single security breach could result in the exposure of personal financial data, violating users' privacy and potentially causing financial harm. 4. Lack of Anonymity: CBDC transactions are expected to be transparent and traceable, reducing the level of anonymity typically associated with cash transactions. Enhanced transparency may be viewed as an advantage in terms of combating money laundering and illicit activities. However, it also challenges individuals' right to conduct financial transactions without unnecessary scrutiny, potentially resulting in a loss of privacy. 5. Third-Party Access to Data: The introduction of CBDCs may involve partnerships or collaborations with private companies or financial intermediaries responsible for facilitating transactions or managing digital wallets. Such arrangements raise concerns about how these third-party entities might access or have access to users' financial data, potentially compromising individual privacy. There has been a massive move towards a central bank digital currency: Monica Crowley

The Risks of CBDCs By The Cato Institute