Planning is underway to develop a digital currency that may “offer a new method to pay” without necessarily replacing cash, according to the Bank of England (BoE) and the UK Treasury. For the best crypto bonuses of 2023 make sure you visit our other pages!
The BoE and Treasury will release a joint consultation document on central bank digital currencies (CBDCs) on February 7 in order to solicit input on how and whether they should move forward with creating a CBDC.
Finance Minister Jeremy Hunt stated in a public statement on February 6 that the two organizations will work to create a modernized digital payments system that doesn’t necessarily eliminate the usage of cash.
“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,” he said, adding that “we want to investigate what is possible first, whilst always making sure we protect financial stability.”
Providing a publicly supported alternative to privately produced stablecoins will be a major area of effort, and officials from the BoE and Treasury anticipate that Big Tech firms will build one in the years to come.
BOE Governor Andrew Bailey stressed that a “digital pound would provide a new way to pay, help businesses, maintain trust in money and better protect financial stability.” as part of the statement.
“However, there are a number of implications which 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.”
On February 7, BoE Deputy Governor Jon Cunliffe is scheduled to deliver a speech to the financial sector to update them on the CBDC work that the central bank and the Treasury have done so far. It was stated that if they decide to proceed, the digital pound and the technology that underpins it won’t be constructed until at least 2025.
Former finance minister and current prime minister Rishi Sunak instructed the BoE and Treasury to work together to establish the Central Bank Digital Currency Taskforce in April 2021. The pair’s main responsibility is to supervise the investigation into and future rollout of the digital pound.
Given the BoE and Treasury’s caution, it seems like progress has been slow too far, although, on January 24, the latter did submit a job description to LinkedIn seeking a team leader for its Payments and Fintech Team of about 20 individuals looking into a possible digital pound.