Decision on Digital Pound Delayed, Bank of England Says
The Bank of England pushes back decision on introducing a central bank digital currency for the public by at least two years.
The Bank of England announced on Tuesday that no decision will be made for at least two years on whether Britain will introduce a central bank digital currency (CBDC), also known as the 'digital pound.' The delay pushes back the timeline for the much-discussed project, which was initially championed by former Prime Minister Rishi Sunak in 2021 during his time as finance minister.
While the idea has gained traction in some quarters, both the Bank of England and the current government have been more cautious.
A public consultation on the potential digital pound raised significant concerns about privacy, with critics warning of potential surveillance risks.
Governor Andrew Bailey had previously expressed reluctance toward a digital currency, saying in October that it was 'not my preferred option.' However, he acknowledged that the CBDC could be necessary if British banks failed to offer competitive payment systems compared to less-regulated tech companies.
In its latest statement, the Bank of England confirmed that it is collaborating with the UK Treasury on the design of the digital pound, but emphasized that the final decision would not be made until after the completion of this design phase.
This process is expected to take a couple of years, during which time the Bank and government will closely monitor the developments in the global payments landscape.
A decision on whether to proceed with a digital currency is now not expected until 2025 or later, according to the Bank of England.
The UK government has previously stated that the digital pound, if introduced, would be a private form of payment but not anonymous.
As with bank accounts and credit card payments, authorities would have the ability to track transactions that are suspected of being involved in criminal activities like money laundering or terrorism financing.
In a statement, the Bank assured that any digital pound would safeguard user privacy, ensuring that neither the Bank nor the government could access personal information or control how individuals and businesses spend their money.
The digital pound, should it be introduced, would represent a significant shift in the way money is handled and could have major implications for the future of the financial system.
While the idea has gained traction in some quarters, both the Bank of England and the current government have been more cautious.
A public consultation on the potential digital pound raised significant concerns about privacy, with critics warning of potential surveillance risks.
Governor Andrew Bailey had previously expressed reluctance toward a digital currency, saying in October that it was 'not my preferred option.' However, he acknowledged that the CBDC could be necessary if British banks failed to offer competitive payment systems compared to less-regulated tech companies.
In its latest statement, the Bank of England confirmed that it is collaborating with the UK Treasury on the design of the digital pound, but emphasized that the final decision would not be made until after the completion of this design phase.
This process is expected to take a couple of years, during which time the Bank and government will closely monitor the developments in the global payments landscape.
A decision on whether to proceed with a digital currency is now not expected until 2025 or later, according to the Bank of England.
The UK government has previously stated that the digital pound, if introduced, would be a private form of payment but not anonymous.
As with bank accounts and credit card payments, authorities would have the ability to track transactions that are suspected of being involved in criminal activities like money laundering or terrorism financing.
In a statement, the Bank assured that any digital pound would safeguard user privacy, ensuring that neither the Bank nor the government could access personal information or control how individuals and businesses spend their money.
The digital pound, should it be introduced, would represent a significant shift in the way money is handled and could have major implications for the future of the financial system.
