Emily Walker
In a recent interview with Peter McCormack, a prominent supporter of Bitcoin, former UK Prime Minister Liz Truss shared her views favoring Bitcoin while expressing strong concerns about central bank digital currencies (CBDCs). Truss, who briefly led the UK as Prime Minister, discussed critical topics such as monetary policy, the independence of the Bank of England, and the potential risks associated with CBDCs.
Support for Bitcoin, Concerns Over CBDCs
Truss articulated her belief in digital currencies, highlighting their potential to reduce the authority of central banks. She stated, “I am a supporter of Bitcoin and cryptocurrency. I think they’re beneficial. I think they help diminish the power of central banks… I’m very worried about anything akin to a central bank digital currency. I believe they bestow excessive power to the state.”
She raised alarms over the lack of accountability of central banks, particularly criticizing the Bank of England for its unchecked authority. Citing issues like quantitative easing (QE) and rising inflation, Truss remarked on the adverse effects, stating, “We’ve experienced significant inflation and QE that lasted excessively long, leading to asset price increases… the outcome was inflation that wasn’t as temporary as we were led to believe.”
These choices in policy, Truss indicated, coupled with the absence of substantial oversight, have imposed financial burdens on the British public.
When asked by McCormack about the necessity of a central bank, Truss noted that if one is to exist, it needs better governance: “That poses an interesting question. If we maintain a central bank, it should be held accountable. Currently, we are facing a situation where we have an unaccountable central bank.”
Truss criticized the delegation of power from the Treasury to the Bank of England, which transpired under former Chancellor Gordon Brown, who aimed to grant the bank operational independence. She argued that this lack of oversight has led to policy errors that carry long-term repercussions. “What Gordon Brown did in granting it independence… we can see the current impact. We’ve had QE for too long, facilitating irresponsible government spending through excessive money printing.”
Truss expressed her apprehensions regarding a potential official digital currency issued by the central bank. She stated, “Such currencies significantly empower the state, and we know that excessive state power can be detrimental… it also appears to be linked to a surveillance-oriented state.”
Her comments resonated with ongoing concerns within the cryptocurrency sector, where critics fear a CBDC might enable tighter government control over personal transactions compared to cash or decentralized cryptocurrencies.
In reminiscing about her government experience, Truss disclosed that inquiries regarding monetary policy were often discouraged: “While at the Treasury, when I inquired about monetary policy, I was informed that it wasn’t our domain but was overseen by the Bank of England… during the leadership race in 2022, I suggested revisiting the Bank of England’s mandate.”
She emphasized the importance of discussing the Bank of England’s mandate and accountability to ensure more effective monetary policies. Truss stated that the Chancellor of the Exchequer should engage openly in these discussions, despite potential pushback from the Bank or fears of undermining its independence.
“Whenever an organization defends its actions by citing its independence, I view that as a significant warning sign. Thus, we must discuss these matters: the global monetary system, central bank independence, and the role of cryptocurrencies,” she stated.
As of this writing, Bitcoin was valued at $94,079.