Modern retail banking creates a kind of panopticon for consumer behaviour, ultimately promising to implement a mechanism that binds all of the financial activities undertaken by an individual to a single, unitary identity. In the age of Big Data, consumers have legitimate reasons to resist such surveillance, particularly in cases wherein monitoring is carried out without their knowledge and judgments based upon such monitoring are used to disincentivise or punish legitimate activities. The risk to consumers increases with the ever-increasing share of financial transactions that are performed electronically. Cryptocurrencies offer an alternative to traditional methods of electronic value exchange, promising cash-like electronic transfers, but in practice they fall short for several key reasons. We consider the false choice between total surveillance, as represented by banking as currently implemented by institutions, and impenetrable lawlessness, as represented by privacy-enhancing cryptocurrencies as currently deployed. We identify a range of alternatives between those two extremes, and we consider some potential compromises that might strike the right balance.

Geoff Goodell is a Senior Research Associate in Computer Science, University College London and is also affiliated with Oxford University’s Centre for Technology and Global Affairs. He is a committee member of the British Standards Institution and Convenor of the ISO working group on Foundations of Blockchain and Distributed Ledger Technologies. Previously, he was an entrepreneur and portfolio manager with a decade of experience in the financial industry. After starting his career as an associate at Goldman Sachs in New York, he later moved to Boston and became Partner and Chief Investment Officer of Phase Capital, an asset management firm, where he developed and managed a systematic macro strategy for institutional clients. His recent work focuses on digital identity, digital payment systems, and regulation.