Tracking CBDCs before they track you

Policymakers around the world have become consumed with the idea of launching central bank digital currencies, or CBDCs. Prior to 2019, only a small handful of central banks were exploring this idea. Yet, today, more than 139 governments are working on CBDCs. Recognizing this trend, the Human Rights Foundation launched a CBDC Tracker in 2023 to help chart it, especially in authoritarian countries. 

As it stands today, 10 countries have launched CBDCs; 48 countries, the Eurozone, the Eastern Caribbean Currency Union, and Hong Kong have CBDC pilot programs; and 73 countries, the Economic and Monetary Community of Central Africa, the Monetary Union of Curaçao and Sint Maarten, and Macao are researching CBDCs. For perspective, more than 3.3 billion people live under authoritarian regimes that have launched CBDCs.

To understand why CBDCs have caught the attention of so many governments, it’s best to first understand what a CBDC is in the first place. 

What is a CBDC?

At the most fundamental level, a CBDC is a digital national currency that’s a direct liability of a country’s central bank. In practice, this means that a CBDC can generally be thought of as digital money provided and maintained by the government. But, it’s a mistake to think that a CBDC is simply a digital form of cash. 

While a CBDC would be a liability of the central bank like cash, it would be unlikely to offer the privacy protections or the finality that paper cash provides today. By opening the door to create a direct connection between the government and a person’s financial activity, CBDCs give governments new powers to conduct sweeping surveillance, restrict financial activity, disrupt the economy, and engage in corruption.   

And it’s here that it becomes obvious why authoritarians have become so interested in reinventing money. 

The Authoritarian Attraction

Government officials have openly and repeatedly said their interest in CBDCs stems from a desire to eliminate cash and tighten control. Consider the following statements. In Iraq, Mazhar Mohammed Saleh, financial advisor to the prime minister, said, “The Central Bank is moving towards issuing a digital currency as a gradual alternative to paper currency.” He added that a CBDC would help enhance “control over financial flows” and track “spending trends.” 

Saleh is not alone. Bank of Papua New Guinea Gov. Elizabeth Genia, State Bank of Pakistan Gov. Reza Baqir, former Central Bank of Nigeria Gov. Godwin Emefiele, and many others have all said a CBDC is the way to eliminate cash. 

It seems that governments recognize that cash is a lifeline for human rights activists. And in the same vein, governments recognize that bitcoin and other cryptocurrencies have become lifelines in the digital age. In line with their desire to eliminate cash, the governments rolling out CBDCs have been simultaneously prohibiting citizens from using cryptocurrency. Varying bans have been levied in China, Iran, Nigeria, and elsewhere.

Belarus In Focus

Few examples underscore these risks more starkly than the pilot program in Belarus. Currently in the pilot phase, the National Bank of the Republic of Belarus expects to launch a CBDC by the second half of 2026.

“The digital ruble is one of our priorities, [and we] are actively working on its creation,” National Bank of the Republic of Belarus Chair Roman Golovchenko said. “First of all, we are faced, of course, with the issue of preserving funds. This is a question of, as I call it, the colorability of these funds. That is, for the state, for example, it will be very important to be able to track how digital money passes through the entire chain.”

The idea that it is “very important” for the state to be able to track how people spend their money is unlikely to surprise those familiar with Belarus. It has been widely reported that the Belarusian government uses “a wide variety [of] illegal surveillance methods and other forms of unlawful privacy violations to control dissent and free speech, and to monitor opposition groups, activists, journalists, and ordinary citizens.”

For example, when protests erupted after the 2020 election of Alexander Lukashenko, the government detained thousands of people. In 2021, the government raided the offices of media outlets and froze the bank accounts of the Belarusian Association of Journalists. In that same year, Lukashenko gave the central bank “the right to prohibit the sale and purchase of currency or impose a tax on it and confiscate dollars and euros from the accounts of legal entities.” In 2023, news broke that the central bank was building a CBDC. 

A CBDC could be used as a new tool in Lukashenko’s arsenal. The regime has already shown that it will not hesitate to turn to sweeping surveillance and control. The difference with a CBDC, however, is that the government would have access to people’s financial activity by default. And by having that immediate access, the government would be able to target protestors before they even reach the streets. 

Tracking CBDCs Before They Track You

The first step to fighting back is raising awareness. As it stands, the public remains dangerously unaware of the risks of CBDCs. But it is for that reason that the Human Rights Foundation launched its CBDC Tracker in 2023 and continues to update the tracker on a weekly basis. The CBDC Tracker provides the public a direct line into what’s happening in jurisdictions around the world. That means breaking down what central banks are doing and also providing context about the human rights abuses taking place in each country so people can know the risks.

If governments are going to start tracking us, it’s time we start tracking them.  

Nick Anthony is a CBDC Tracker fellow at the Human Rights Foundation.