Why That Matters More Than You Might Think
When people hear “digital money”, they picture Bitcoin, apps or contactless cards.
That misses the point entirely. What’s being built in the UK and across Europe, is not just digital money. It’s a linked system which includes digital ID digital money and digital ID digital money:
- Digital identity
- Centralised digital currency
- Rules-based spending infrastructure
You don’t get one without the others.
And while the language used by government and central banks is calm and reassuring, it always is, the real-world implications deserve proper scrutiny. That’s especially so for people already living month to month.
Step One: The Quiet(ish) Rollout of Digital ID in the UK
Before digital money can work at scale, the state needs to know who is transacting.
That’s why the UK has prioritised digital identity first.
What’s already happening:
- GOV.UK One Login
A single digital ID for accessing state services
https://www.gov.uk/government/publications/introducing-govuk-one-login - Used for:
- Universal Credit
- HMRC
- DVLA
- Right to Work checks
- Future online public services
The government is clear this is about “convenience”.
But functionally, it creates:
- One identity
- One authentication layer
- One gateway to state systems
Once money is added to that ecosystem, identity and spending become inseparable. Watch how quickly it will be ‘if you want to access state benefits, you will need a digital ID.’ This has already happened.
Step Two: Digital Money That Knows Who You Are
The Bank of England’s proposed digital pound would sit on top of this identity layer.
Official source:
- Bank of England – The Digital Pound Consultation
https://www.bankofengland.co.uk/paper/2023/the-digital-pound-consultation-paper
The Bank states it would not control how money is spent. They’re hardly likely to say any different.
However, the architecture explicitly supports programmable payments via wallet providers and APIs.
That distinction matters, because history shows:
Capabilities outlast policies.
Why People Are Worried: Programmable Money in the Real World
This is where concerns stop being abstract and start becoming personal.
None of the scenarios below are current UK policy but all are technically possible once identity-linked programmable money exists.
Scenario 1: Geo-Fencing Your Money
You’re in Spain for a few days.
You try to pay for something using your UK digital wallet.
Understanding the Link Between Digital ID and Digital ID Digital Money
Payment declined.
Why?
- Spending restricted outside your “registered location”
- Anti-fraud rules
- Policy-linked conditions
Geo-fencing already exists in banking and benefits systems.
CBDCs make it automatic and universal.
Scenario 2: Carbon, Behaviour or Policy Limits
Governments are openly discussing:
Carbon budgets
- Consumption targets
- Behavioural “nudges”
Now imagine those ideas applied at wallet level.
Not enough “allowance” left this month?
Certain purchases simply don’t go through.
No court order.
No human involved.
Just rules.
Scenario 3: Social or Content-Based Restrictions
This is the one people laugh off – Ha! until they don’t.
Imagine:
An automated system flags an online post
- Your account enters “review”
- Payments are limited temporarily
Not punishment and it isn’t censorship. They’ll just call it “risk management”.
Banks already close accounts for reputational reasons. CBDCs centralise that power. Tried paying for something in cash over £1,000 recently? We have and we’ve had to explain to a complete stranger who happens to work for a bank what we wanted to do with OUR money and WHY we were sending it to the person we were!
Scenario 4: Benefit-Linked Spending Controls
If your income includes:
- Universal Credit
- Housing support
- State assistance
Then digital money could arrive pre-labelled.
Spendable on:
- Food
- Energy
- Transport
Not spendable on:
- Anything else
Again, this isn’t current policy. But it could be very soon.
The House of Lords warned explicitly about this risk.
Source:
- House of Lords Economic Affairs Committee (2022)
https://publications.parliament.uk/pa/ld5802/ldselect/ldeconaf/131/131.pdf
Their conclusion:
“The case for a digital pound has yet to be made.”
Why This Hits Low-Income and Young People First
If you’re:
- 18–30
- Renting
- On unstable income
- Borrowing £300–£500 to survive the month, then you live closer to the edge of system decisions than anyone else.
When money becomes:
- Conditional
- Reviewable
- Centrally flagged
The people with no buffer feel it first.
One blocked payment doesn’t just mean inconvenience, it means missed meals, missed rent, missed transport to work.
“But Won’t This Reduce Fraud and Scams?”
Yes. Possibly. Unless you already feel the ‘money laundering’ rules are already a scam in themselves. See the above performance on transferring your own money.
Programmable money could:
- Stop stolen funds instantly
- Block known scam routes
- Reduce money laundering
But safeguards always cut both ways.
Every tool built to stop crime can also:
- Be widened
- Be automated
- Be misapplied
That’s why infrastructure design matters before rollout, not after.
The Sensible Position: Neither Panic Nor Blind Trust
CBDCs are not evil by default.
Digital ID is not inherently sinister.
But linking identity, money, and rules into one system is historically unprecedented.
Once built:
- It won’t be dismantled
- It won’t be optional
- It won’t only affect “other people”
The question isn’t “Would the current government abuse this?”
It’s “Could any future government?”
That’s the question citizens should be asking now. Any look back through history will show you how once liberties have been taken away they are never given back. Once undertaken, until the top level of society is cleared away completely, the freedoms and liberties which were once taken for granted, will never be restored.
If you find yourself in need of some extra help this month and it can’t wait any longer, you could try our Emergency Loans from one of our fully authorised lending panel members. They might be able to help.
