The UK signals intelligence agency GCHQ has warned that China’s digital renminbi, risks becoming a tool to surveil users and exert control over global currency transactions.
UK’s GCHQ raises fears of China’s digital renminbi
In an interview with the FT, Sir Jeremy Fleming said that while digital currencies present a “great opportunity” to democratise payment systems, the development of this new technology also poses a threat.
“If wrongly implemented, it gives a hostile state the ability to surveil transactions,” he said. “It gives them the ability . . . to be able to exercise control over what is conducted on those digital currencies.”
The spy chief spoke to the FT earlier this week from the London headquarters of the National Cyber Security Centre, GCHQ’s defensive arm, ahead of the publication of a new cyber strategy.
This document, which is expected later this month, will act as a blueprint for countering digital threats at a time when warfare is moving increasingly into cyber space.
Fleming said GCHQ was “a poacher and gamekeeper” in this domain, charged with both protecting the country against attacks and mounting offensive operations against adversaries.
The agency, which has listening stations across Britain and overseas, works alongside its better-known sister services MI5 and MI6, specialising in domestic and overseas intelligence, respectively.
However, GCHQ’s digital expertise is in high demand due to what Fleming calls the growing “prominence” of technology in society. In fact, the threats have changed significantly since the agency’s historic role in the second world war, when GCHQ codebreakers decrypted Nazi communications from draughty huts at Bletchley Park.
He said China was now the “biggest strategic issue” facing the UK, and was expanding its espionage operations and seeking control of digital infrastructure.
“China has stolen a march . . . [it’s] investing very heavily, overtly and covertly, and that’s because it is starting to exercise real influence on the way in which the rules of the road are going to operate in a technology and digital context,” Fleming explained. “We have to work out what our response is to all of that.”
Earlier this month Richard Moore, head of MI6, suggested China was exporting technology that allowed it to exert a “web of authoritarian control” around the world and accused Beijing of ensnaring other countries in “data traps”.
Digital currencies could be one such trap, with 140 million individuals and businesses already signed up to use the digital renminbi, according to the People’s Bank of China.
“In the context of the forthcoming Olympic Games . . . China is taking every opportunity to project their digital currency, and their hope is that foreign visitors will use it in the same way as domestic visitors,” Fleming said.
As cyber technologies proliferate, not all threats come directly from traditional adversaries.
Last month the US sanctioned NSO Group, an Israeli spyware manufacturer, following accusations that its software had been used by authoritarian governments to surveil the phones of human rights activists and journalists around the world, including the editor of this newspaper.
Fleming described such a deployment of NSO hacking capabilities as “completely beyond the pale”, adding: “My personal view is that countries or companies that promulgate [technology] in an unconstrained way like that are damaging and should not be tolerated.”
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