UK Cyber Spy Chief Claims China Might Use Digital Yuan for Surveillance, Transaction Control
© AP Photo / Vincent YuA Chinese yuan sign is seen at a currency exchange shop in Hong Kong, Tuesday, Aug. 11, 2015. China devalued its tightly controlled currency Tuesday following a slump in trade, allowing the yuan's biggest one-day decline in a decade. (AP Photo/Vincent Yu)
© AP Photo / Vincent Yu
The Chinese Central Bank has run several tests of the government-back digital currency, which, unlike cryptocurrencies, does not promise anonymity to its users. However, so far these tests have remained mostly local or time limited, with a countrywide rollout yet to be unannounced.
China might use its digital renminbi for surveillance over its users and to control global currency transactions, the head of the British digital spy agency GCHQ, Sir Jeremy Fleming, has suggested in an interview with the Financial Times. He noted that while digital currencies in general present a "great opportunity" for the world, they might be misused.
"If wrongly implemented, it gives a hostile state the ability to surveil transactions. It gives them the ability [...] to be able to exercise control over what is conducted on those digital currencies".
Fleming went on to say that efforts by a foreign state to gather information on British citizens en masse might prove "deeply intrusive" and result in an "erosion of [the UK's] sovereignty". He added that China is not coordinating its efforts in introducing digital currencies with other global powers as he would have hoped.
"In the context of the forthcoming Olympic Games [...] China is taking every opportunity to project their digital currency, and their hope is that foreign visitors will use it in the same way as domestic visitors".
The top UK digital spymaster further painted Beijing as the "biggest strategic issue" that London faces right now. He cited the allegedly expanding "espionage operations" and attempts to "control of digital infrastructure" by China as the main source of concern. Fleming claimed that China invests "very heavily, overtly and covertly" in digital infrastructure and is starting to shape the global rules in terms of "technology and digital context".
The GCHQ head noted that London will have to "work out" a response to Beijing's current policies and aspirations. He stressed, however, that whatever the response might be, the two states need to keep their trade open and continue to cooperate on climate change.
11 November 2021, 13:49 GMT
Some 140 million people have already opened digital renminbi wallets, according to the Bank of China, which oversees the online currency's development. Beijing has carried out several massive tests of the currency, giving it out to citizens and promoting companies to accept it as payment or outright paying its workers with it. One of the biggest tests took place in November, as one of the Chinese e-commerce platforms, Jingdong (JD), announced it would accept the digital yuan during the year's biggest sale dedicated to "Singles Day". However, Beijing has so far stopped short of announcing a countrywide rollout of the digital currency.