Beware! CBDC Has Serious Privacy Implications

The widespread use of cryptocurrency as an alternative method of payment has led to a growing digital ecosystem over the years. Governments are behind the curve, continuing to wrestle with how to develop effective public policy measures to regulate its use.

The Bank of Canada has been actively exploring the option of a central bank digital currency (CBDC) to address the perceived threat of cryptocurrency for several years. This national digital currency would be centralized, meaning that the bank would be able to monitor and regulate the transactions within that network.

Cryptocurrency is a decentralized digital currency that relies on the application of cryptography to conduct financial transactions and protect against counterfeit and fraud. Cryptocurrency is an alternative to sovereign currencies that are issued by state governments, like the Canadian dollar.

My doctoral research explores how states try to regulate cryptocurrency — a…