Cryptocurrency NewsBank of England and Treasury Deliberate Over Launch of Digital Pound with...

Bank of England and Treasury Deliberate Over Launch of Digital Pound with Cautious Strategy

In a progressive yet careful move, the Bank of England along with the U.K. Treasury is advancing their examination of a potential digital pound, emphasizing on conducting thorough research and laying the necessary legislative foundation, while maintaining a non-committal stance regarding its actual implementation.

Through their recent feedback on a consultation concerning a digital pound proposal, the Bank of England and the U.K. Treasury have showcased a methodical and exploratory methodology in the development of a central bank digital currency (CBDC).

This feedback, which addresses a consultation document dated February 2023, demonstrates an ongoing interest in the concept of a digital pound, but refrains from making an unequivocal commitment to its creation. The approach of the Bank of England and Treasury is marked by the recognition that it’s too early to make a decisive judgment about the need for a CBDC in the UK. They are set on continuing their research and design processes, underlining that such efforts are vital to stay abreast of the changing landscape of payments and to reduce lead times in case a decision is made to introduce a digital pound.

A significant element of their response is the investigation into both retail and wholesale frameworks for the CBDC, with the earliest possible launch not expected before 2025. In addition, the Bank of England and Treasury have acknowledged concerns regarding privacy and trust, declaring that new legislation aimed at safeguarding user data and privacy will be enacted prior to any launch.

Deputy Governor for Financial Stability at the Bank of England, Sarah Breeden, emphasized the importance of trust in all forms of money, stating, “The decision on whether or not to introduce a digital pound in the UK will be a major one for the future of money. Building trust and gaining the support of the public and businesses, who would be the end-users if introduced, is crucial.”

The response also reassures the public that traditional forms of money, such as banknotes and coins, will remain accessible, with the digital pound serving as an additional option rather than a replacement.

The consultation drew over 50,000 responses, reflecting significant public and business interest in the societal impacts of a retail CBDC, including the future of cash and user rights.

The Bank of England and Treasury’s reaction to the consultation, presented in the document “The Digital Pound: A New Form of Money for Households and Businesses,” outlines their plan to utilize the findings, aiming to position the U.K. as a leader in digital currency exploration while adopting a prudent and well-informed strategy.

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