Britcoin: UK government reveals ‘digital pound’ plans
Summary of Development
A central bank digital currency (CBDC) is currently being explored by the Treasury and the Bank of England.
A digital pound accessed through digital wallets and issued by the Bank of England is likely to be needed in the future, according to a new paper published by HM Treasury and the Bank of England.
Central bank digital currencies (CBDCs), often seen as a state version of crypto, have long been touted as an inevitable route for government to issue for households and businesses to use for everyday payments in the era of blockchains.
While “no decision has been taken at this stage to introduce a digital currency”, the Bank of England says it is taking forward further research and development work on the idea. A consultation is being launched, with the UK public “invited to give their views” on the scheme.
Both HM Treasury and the BoE say they “want to ensure the public has access to safe money that is convenient to use as our everyday lives become more digital while supporting private sector innovation, choice, and efficiency in digital payments.”
"While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that’s trusted, accessible, and easy to use. That’s why we want to investigate what is possible first, whilst always making sure we protect financial stability,” Chancellor of the Exchequer Jeremy Hunt said.
“As the world around us and the way we pay for things becomes more digitalised, the case for a digital pound in the future continues to grow. A digital pound would provide a new way to pay, help businesses, maintain trust in money, and better protect financial stability,” said Andrew Bailey, governor of the Bank of England.
“However, there are a number of implications that our technical work will need to carefully consider. This consultation and the further work the Bank will now do will be the foundation for what would be a profound decision for the country on the way we use money,” Bailey said.
According to a press statement, the two institutions say a CBDC would be “subject to rigorous standards of privacy and data protection” and that neither Government nor the BoE would have access to personal data with holders having the same level of privacy as a bank account.
A decision about whether to implement a digital pound will be taken around the middle of the decade.
Links: https://www.altfi.com/article/10377_britcoin-uk-government-reveals-digital-pound-plans