Bank of England’s Undecided Stance on Digital Pound

The Bank of England (BoE) and HM Treasury in the UK have responded to a consultation on the potential launch of a central bank digital currency (CBDC). They stated that their main focus would be on privacy and control. While no final decision has been made, the BoE and HM Treasury will continue to explore the feasibility and designs of a CBDC. In the event of a CBDC launch, they also emphasized the importance of protecting access to cash, ensuring that residents have an additional payment option. They assured that if a digital pound is implemented, primary legislation would be introduced to guarantee users’ privacy and control, with no access to personal data by the Bank or the government.

The UK government has been urging the BoE and HM Treasury to provide more transparency regarding potential expenses related to the launch of a CBDC. Concerns have been raised by many UK residents about the possibility of government surveillance of financial transactions and the loss of privacy. CryptoUK, a self-regulatory trade association, called for more detail from the government and the BoE, as well as a clearer plan and timeline for the next steps of a digital pound. They highlighted that the lack of clarity and direction could create uncertainty and frustration for crypto asset businesses in the UK.

The BoE and HM Treasury have stated that the launch of the digital pound, also known as ‘Britcoin’ by some members of the public, is not expected to happen before 2025 if they proceed with the CBDC plan. The UK government has seen various changes in leadership since the idea of a digital pound was initially proposed, including officials responsible for economic policy oversight. In the US, a digital dollar could potentially become a campaign issue in the 2024 Presidential Election. Former President Donald Trump, who currently leads the Republican Party, has stated that he would “never allow” a digital dollar to protect Americans from government tyranny. Florida Governor Ron DeSantis, who was against a CBDC, has dropped out of the race.

The response from the BoE and HM Treasury regarding the potential launch of a digital pound emphasizes the importance of privacy and control. They aim to protect access to cash and ensure users’ freedom in spending their digital pounds. The UK government continues to seek more transparency on the expenses associated with a CBDC launch, while the industry calls for a clearer plan and timeline for the digital pound. The expected launch is no earlier than 2025, subject to further development and decision-making. In the US, the possibility of a digital dollar becomes a topic of discussion, with differing views among political figures.