Reform shows its paranoid streak over digital currencies

Flipping through Reform UK’s ‘Contract With You’ – its manifesto in all but name – I came across something strange. It was so out of place that it stuck out like a sore thumb.

In the section on ‘reaffirming British sovereignty’ lies a pledge to oppose the creation of a central bank digital currency (CBDC). In the same paragraph, Reform says it will ‘reject the influence of the World Economic Forum’ and threatens to leave the World Health Organization unless it undergoes fundamental reform.

The whole section reeks of the paranoid streak in Reform’s politics. Judging by some of Nigel Farage’s social media posts, he seems to think there is a global cabal of supranational organizations determined to push various ‘digital things’ on the world population. It’s all in the cause, this train of thought seems to imply, of creating some evil database, invading people’s privacy and leading to overriding control – national or supranational.

These kinds of government-led innovations have been attacked by various right-wing populist parties. Germany’s AfD has railed against the digital Euro project, claiming it is a step towards the EU carrying out “unlimited surveillance” of citizens. In the US, Ron DeSantis pledged to ban CBDC during his failed campaign to be Republican presidential nominee. As governor of Florida, he signed a bill to ban the use of CBDC in the state to protect Floridians from “government overreach and vigilante corporate monitoring.”

The merits of CBDCs are certainly up for debate. By using blockchain to create a digital-only currency, they have the potential to make payment systems much cheaper, more efficient and combat fraud. However, questions remain about their potential impact on financial stability, along with the wider commercial banking system, and whether it spells the death of cash and consumer choice.

Nevertheless, it is interesting to see how political parties – now including Reform – focus on this kind of little-known and little-understood issue, and demand that it be thrown out completely.

CBDC has sparked some debate among regulators and politicians, but it is certainly not something that is being talked about in the pubs and clubs of Britain. Maybe that’s the point for populists: they argue it’s another example of the ‘elitist blob’ creating something bad and not bothering to tell you about it until it’s an fait accompli.

In fairness to Farage and co, there is something to that argument. No one has yet made a serious effort to persuade our elected representatives or the wider public about the benefits CBDCs can bring.

But the rise of populist tech skepticism should worry the European tech fraternity. If parties like Reform make such policies more mainstream, it could spell bad news for a whole range of tech innovations and the tech sector in general.

The logical extension of rejecting something like CBDC is to say no to many other spoken digital services that could improve our lives, the function of large and small businesses and the operation of the state.

Digital ID – a secure, digital-only way of proving you are who you say you are – already lambasted by Farage as a globalist plot, will be next in line. This is despite the fact that digital ID would make everything from opening a bank account to buying a house or using government services much easier and more efficient. It would also make it incredibly difficult for illegal immigrants to live and work in countries they entered without permission, a major concern of populist parties.

Perhaps open data initiatives will soon be under attack as well. Parties such as Reform may want to put the brakes on the idea of ​​consumers sharing their data from various organizations about financial services, utilities and health – even if they could bring economic benefit.

It may be a mistake to expect coherence in the development of a right-wing populist policy platform. But when Reform puts CBDC in the same bucket as WEF and WHO membership, we should all be concerned about where such conspiratorial thinking might lead.

This is not to say that right-wing populists hate all technological advances. Nor is it the case that technocratic government is the be all and end all.

But the center-right would do well to keep faith with the possibilities of technology. Innovation must come with a message of hope and optimism, not fear and suspicion.

In many ways, populism is the anthesis of this. It would be a shame to let populists’ incoherence spoil the debate.

– the best pieces from CapX and around the web.

CapX depends on the generosity of its readers. If you appreciate what we do, please consider making a donation.

Rolf Merchant is a director at Audley, a global strategic advisory firm.

Columns are the author’s own opinion and do not necessarily reflect the views of CapX.