How digital cash got caught up in the culture wars

At a conference in April, Floridas governor Ron DeSantis veered from familiar swipes at diversity, inclusion and corporate wokeness to take aim at a more surprising target.

One of the things were going to ban in Florida this year is the idea of a central bank digital currency, he told the audience in Pennsylvania, to whoops and cheers. Guess whatll happen? Theyre going to try and impose an ESG agenda through that.

A few years ago, CBDCs were the domain of policy wonks. Today, they are a topic of growing political importance and, among fringe groups, creeping paranoia. Although the exact nature of CBDCs vary from country to country, their overarching nature is that of a digital version of physical cash money issued by the central bank, unlike cryptocurrencies, which are created by private entities.

More than 100 countries are exploring their introduction, ranging from China whose e-yuan offers greater control and surveillance to Nigeria, where the eNaira was launched in part to help crackdown on informal cash use and electoral fraud.

The US and the UK are no exceptions. In January 2022, the Federal Reserve launched a period of debate and public comment on CBDCs. The Boston Fed and the Massachusetts Institute of Technology completed a project examining the technical feasibility of digital cash in December.

Placards from a protest against CBDCs in Whitehall
Protests against the prospect of a CBDC have taken place in London, attracting conspiracy theorists who see it as a tool designed by global elites to destroy freedom Charlie Bibby/FT

In February, the Bank of England and Treasury announced they were considering plans for a digital pound, driven by fears that in an increasingly cashless world, private companies are offering alternatives to central bank money.

If alternative payment systems were to gain wide adoption, they could undermine financial stability and central banks ability to enact monetary policy. And if these methods are not interoperable, it could hamper peoples ability to carry out basic transactions.

I think they [the BoE] were really kicked into action by [Metas] Libra [project], says Varun Paul, who spent more than a decade at the BoE and is now director of CBDC and financial markets infrastructure at fintech Fireblocks. Libra was originally envisioned in 2019 as a global stablecoin, a cryptocurrency with a stable value. But fears over stability and money laundering led the authorities to push back. It was finally wound down in 2022.

The digital pound would run on a digital ledger operated by the BoE. Its implementation would rely on a private-public partnership between the central bank and private companies, who would provide access to the CBDC by creating electronic wallets or smart cards.

Under these proposals, the digital pound will be as private as the card payments and bank accounts that millions use every day, says the Treasury. This means [neither] the government nor the Bank of England can access anyones personal data or see how people are spending their money.

But a growing throng of culture warriors echo DeSantiss view, or go further, decrying CBDCs as a tool designed by global elites and the World Economic Forum to destroy freedom, part of the same conspiracy milieu as vaccines and climate policy.

A shopper uses a digital payment service to purchase food at a stall in Beijing
A shopper uses a digital payment service to buy food at a stall in Beijing. China is among the more than 100 countries exploring the introduction of a CBDC Bloomberg

The impact of misinformation on society can be physical, ranging from attacks on 5G masts in the UK in 2020 to the attempted insurrection at the US Capitol building on January 6 2021. So far, misinformation surrounding CBDCs is yet to reach such heights. But it risks undermining adoption and entrenching fears about government surveillance.

Conspiratorial noise has distracted from reasonable fears raised by experts and campaigners about threats to privacy and inclusivity. Without an adequate response to these issues, campaigners say, there will be no public buy-in.

If people dont feel confident engaging with a CBDC or any other digital form of money, you wont have consent, says Lord Christopher Holmes, a Conservative peer who campaigns for greater access to payment methods, and without consent, you havent even got off the starting block.

Mounting distrust

Conspiracy theories about banking date back centuries. But in the UK, the announcement of a joint Treasury-BoE CBDC task force in 2021 galvanised the latest iteration of the movement, according to Samuel Doak, a fact checker at anti-misinformation unit Logically Facts. A quick search on social media reveals that for a growing audience, CBDCs are the gateway to controlling a global population already cowed by a planned pandemic.

What they would like to do is to be able to strip you of your money and to be able to lock you down, said Joe Rogan, an influential podcaster, in a conversation with rapper Post Malone broadcast in August.

A leaflets left behind by an anti-CBDC protester at a demonstration in London last month
A leaflet left behind by a pro-cash campaigner at a demonstration in London last month. The UK government has given its financial watchdog the powers to protect cash infrastructure Charlie Bibby/FT

A circulating post on X, featuring a video from an account which claims that evil fallen angels rule this world, warns that mortgage contracts could be voided if banks switched to CBDCs. It has been viewed almost half a million times.

Beliefs that CBDCs are purely a tool to monitor and control the public are mainstream, says Doak. Conspiracy theories relating to CBDCs have become key to the Great Reset, an overarching amalgamation of conspiracy theories rooted in the belief that the World Economic Forum, private individuals and state actors are planning to reshape society on a global scale through secretive and repressive means, he says.

The amorphous and confused nature of the Great Reset means CBDCs are often touted as part of a set of measures, says Doak, that includes open borders, efforts at depopulation and the imposition of 15-minute cities a form of urban planning, which conspiracy theorists believe are a tool to limit movement.

A series of financial scandals this year have exacerbated distrust, says Aoife Gallagher, a senior analyst at the Institute for Strategic Dialogue.

Events like the Coutts saga [in which the private bank closed former Brexit party leader Nigel Farages bank accounts] and the Silicon Valley Bank collapse serve as further justification within these communities, she says.

Experts say that, so far, CBDCs have not attracted the level of threats and violence that has manifested in other parts of the Great Reset. But it is increasingly part of the mainstream political landscape.

Last month on X, Vivek Ramaswamy, a Republican presidential contender, declared CBDCs to be just the latest Trojan horse of the Great Reset, and accused US Treasury secretary Janet Yellen of begging Americans to keep up with the Jinpings, referring to the Chinese presidents given name.

The issue is not limited to the Republican party. Robert F Kennedy Jr, who is running for the Democratic nomination, said in April that CBDCs grease the slippery slope to financial slavery and political tyranny.

Tulsi Gabbard, who ran for the 2020 Democratic nomination but has increasingly taken more conservative positions, appeared on Tucker Carlsons Fox News television show before the presenter was sacked, describing CBDCs as the latest effort by those in power in our country who are intent on undermining and taking away our freedoms.

Josh Lipsky, a senior director at the Atlantic Council who has studied the topic for half a decade, says that seeing CBDCs thrust into the political limelight is bizarre. The idea a payment issue would become so political is shocking to me, he says. The fact its even mentioned in a presidential campaign is striking.

Anti-CBDC signs on sale during this years bitcoin conference in Miami Beach
Anti-CBDC signs on sale during this years bitcoin conference in Miami Beach. Ron DeSantis, Floridas governor, has been vocal in his opposition to the concept Eva Marie Uzcategui/Bloomberg

Experts would prefer to focus on the small print of the CBDCs themselves.

I think things arent in a particularly good place overall, says Rohan Grey, assistant professor of law at Willamette University in Salem, Oregon. The general consensus is that theres no articulation on the importance of privacy to overcome concerns [about issues including] terrorism, crime and tax evasion.

The BoE and Treasury said in February that unlike cash, the digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime. Smaller payments could have greater privacy, they added.

A corollary to that is the question of how necessary digital IDs would be to access a CBDC. The topic has often faced strong pushback in the UK on privacy grounds, but it also risks leaving out the digitally excluded, including the elderly or those without funds to access required devices.

Will some people be locked out of the system? says Mark Johnson, advocacy manager at civil rights group Big Brother Watch. Theres a possibility people at the fringes may not have good access to money, exacerbating the way that the financial system already pushes them away.

The potential for a CBDC to offer greater inclusion than the traditional financial system is limited in current proposals, according to Grey. For example, the digital pound paper suggested that the amount individuals could hold would be limited, to avoid encouraging them to move their deposits from commercial banks to the BoE.

Central banks have made clear the whole [idea] is not to take anything away from existing players nobody is saying that theyre going to replace Visa and Mastercard, Grey says. The aversion to upsetting the status quo means there is little opportunity for a radical rethink of the system. The commitment to a public-private partnership model is a commitment to impotence, he adds.

In May, Mastercards European president Mark Barnett told the Financial Times that he was not concerned about a CBDC supplanting existing payment systems such as cards.

The CBDC might compete a little bit but given what were talking about in terms of holdings and use cases, I dont think its a huge deal, he said.

A cashless future?

It is impossible to discuss CBDCs without considering the future of physical cash. While the UK proposal in February said that a digital pound would sit alongside its physical counterpart, accessing and using cash is increasingly difficult.

Farage, who has criticised CBDCs, has waded into the debate in the UK, sponsoring a petition to protect cash via broadcaster GB News, for which he is a presenter, and posting, The banks are trying to force a cashless society upon us! on X in August.

A shopper pays with cash at Borough Market in London
A shopper pays with cash at Borough Market in London. Physical cash use remains below 2019 levels, despite more than 7bn being withdrawn from Link ATMs in July Charlie Bibby/FT

In many ways, the former Brexit party leader raises a common grievance. Providing cash services is expensive for lenders, who will close 636 of their branches by the end of the year, based on data from ATM operator Link. Consumer group Which? estimates that will leave just 4,000 branches across the UK.

We understand that cash remains king for many, which is why we have protected access to cash in law meaning the vast majority of people will have to travel no further than three miles to withdraw money, the Treasury says.

Although the government has given the Financial Conduct Authority powers to protect cash infrastructure, its latest policy statement on the subject suggested that it believed current levels of cash access are acceptable.

Author and journalist Brett Scott notes the increasing rate at which banks are closing their offices in towns and cities across the UK produces its own feedback loop, which justifies further closures.

You see this systemic vortex where the bank closes down a branch, and its harder for businesses to deposit cash, so they prefer if you pay by card, which then gets picked up in the statistics, he says. All that gets reported as being consumer driven when its actually bank automation.

And while physical cash use remains below 2019 levels, figures from Link show that more than 7bn was withdrawn from its ATMs in July, a reflection of its importance, in particular to disadvantaged groups.

For people who are less well off, they can find great difficulty in budgeting digitally, says Derek French, a former NatWest executive and a long-term campaigner for cash access. You find a lot of people who draw money from a cash dispenser and say, This will last me a week.

Increasing numbers of branch closures and businesses that no longer accept cash are feeding conspiracy theories, says digital extremism researcher and podcaster Annie Kelly, both online and at rallies and protests.

The cashless society stuff is pretty much everywhere in British conspiracy groups, she says. You see lots and lots of signs and banners which discuss how the move to a cashless society is being orchestrated by elites to make the human population easier to control.

A video of Piers Corbyn, brother of the former Labour leader and an anti-vaccine campaigner, attempting to pay with cash at a cashless Aldi store this year has racked up millions of views on X.

A lot of these people are responding to a way in which they are being undermined and left behind by this [move to digital payments], Kelly says. People are responding to a real shift, even if I dont agree with the conclusions.

Scott is scathing of the parts of the payments sector that he believes are fanning the culture wars. Ive seen a lot of situations now where people in the fintech industry are weaponising the fact that theres these far-right-type people involved to try and say any pro-cash position is regressive and conspiratorial, he says. People now basically associate progressive thought with Visa and Mastercard. Thats kind of scary.

Though the decision on the digital pound has not yet been taken, it is clear to experts that the UK government and the BoE and their counterparts globally need to change communications strategy.

Videos of officials from central banks and multinational organisations discussing CBDCs at Davos may be useful when winning over policymakers, but they do little to disabuse notions that ordinary citizens are not involved in the process of their deployment.

A cash till
Researchers have warned that increasing numbers of businesses that no longer accept cash, coupled with bank branch closures, are feeding conspiracy theories Charlie Bibby/FT

I think the kind of [language] that banks and the World Economic Forum use very much appeals to politicians looking for innovative solutions, says Kelly. Its something that looks a bit efficient and technocratic, and on social media it can often look very cold, very bloodless and quite frightening.

Scott cautions that simply dismissing CBDC critics out of hand risks leaving the opposition position open to the culture warriors.

To some extent, I dont mind some forms of corporate services, but there needs to be some counterbalances, and its OK to say that, he says. Right now, its basically just the Nigel Farages of the world [opposing] it.

Holmes, the Conservative party peer, points out that while the government has worked on cash access, there has been less emphasis on the acceptance of physical money by businesses.

Any public entity should be mandated to accept cash thats the minimum one should expect, he says. Then you can consult on how you broaden that out.

And open debate is also vital, says Paul, the former BoE official, to ensure that the information that is in the public domain is accurate. The BoE has not specified enough of the stuff [CBDCs] could do, so you end up seeing people over interpreting or assuming things, he says. They also need to prove how theyll do things [such as protecting privacy] from a technical point of view as well as a legal one, so no future governments can change that.

Any deployment also needs to learn from mistakes in other countries, he says, such as Nigeria, where the release of the CBDC was coupled with the sudden withdrawal of physical cash, leaving many unable to shop for essentials.

You dont want to turn adoption on over night, Paul says. Money is so important for the social fabric of life, and we can under appreciate that sometimes.

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