Rishi Sunak’s new “Britcoin” digital currency could be used to check shoppers’ ages or nationalities, a developer working on the project has said, amid mounting concerns over privacy.
Alastair Johnson, founder of Nuggets, said that consumers could choose to share personal data with a shop when they buy certain items, such as to speed up age checks on cigarettes and alcohol.
Mr Johnson – whose business is working for the Bank of England on a possible ID verification for the system – said that the project could be more private than holding a bank account, where information is stored on servers that could theoretically be hacked.
Nonetheless, privacy campaigners said they were concerned about the plans.
Mr Johnson said: “The principle is that the Bank of England wants to have no personal identifiable information on their side. The biggest element is for privacy, because there is a lot of concern about identity, correlation and tracking.
“Even though we provide the decentralised identity, we as Nuggets have no access to see anyone’s data at any point, at any time.”
Britcoin – known officially as central bank digital currency (CBDC) – is being developed jointly by the Bank of England and Treasury as an online alternative to cash.
The proposal is part of a wider effort to turn Britain into a tech hub by embracing new technology.
However, it has attracted criticism from opponents concerned about privacy and unsure whether it is really necessary.
A public consultation by the Bank and the Treasury attracted more than 50,000 responses, many of them negative.
If Britcoin works as described, no centralised information would be held by the Government and users would have full control over what they chose to share.
Speaking earlier to Bloomberg, Mr Johnson said that the system might be able to replace showing a drivers’ licence or passport.
He said: “You can proof-of-age without demonstrating age.
“There’s other assets that you can demonstrate – are you a UK citizen on your passport, and so on. There’s numerous scenarios that you could demonstrate for that.”
But campaigners said it is vital to stop a new state-backed digital currency from enabling intrusive oversight and monitoring of transactions.
Susannah Copson at Big Brother Watch said: “The proposal to use a CBDC to verify personal details, such as age or citizenship, raises serious privacy concerns. If used in this way, a CBDC would generate vast amounts of data that would allow anyone – from government to third party companies – to develop extensive profiles on the public and snoop on their spending more than ever before.”
Lord Bridges, chairman of the Economic Affairs Committee, said the case for establishing a CBDC in the first place has not been fully established, and that there are clear privacy concerns.
He said: “This raises issues around who holds the data, how securely, mindful that GCHQ has been among many that have pointed to how, if wrongly implemented, the creation of a CBDC ‘gives a hostile state the ability to surveil transactions’.”
Danny Kruger, a Conservative MP and member of the Treasury Select Committee, said individuals must be able to spend the digital money free from surveillance.
He said: “Any move towards a digital pound should explicitly address the need for people’s data to be protected – and there must be no opportunity for the state to monitor or control people’s spending.”
