Britain is intensifying efforts to develop a digital version of the pound in response to privacy concerns and criticism from financial institutions. The Treasury and Bank of England (BOE) emphasize the need for further study on the Central Bank Digital Currency (CBDC), or “Britcoin,” before a final decision, anticipated in 2025-2026, subject to Parliament approval. The move aims to adapt to evolving payment trends and provide a state-issued online form of money.
While the government addresses privacy worries stemming from conspiracy theory groups, it asserts that the digital pound won’t replace cash and won’t have government programmable functions. The goal is to maintain some control over money usage as consumers shift away from cash transactions to card-based and mobile payments.
Acknowledging concerns, the BOE and Treasury confirm that the digital pound won’t be anonymous, citing the need to combat financial crime. Plans include allowing savers to hold £10,000 to £20,000 in a CBDC wallet, though commercial banks advocate for a lower limit to prevent potential risks to financial stability.
The announcement follows a consultation that received a record 50,000 responses, exploring the feasibility and potential design choices for the CBDC. The UK lags behind the European Central Bank in digital currency development, with the latter entering the preparatory stage for a digital euro in October. Skepticism persists among UK lawmakers and the public, with concerns about the balance between CBDC benefits and risks, including fears of bank runs during crises.
The BOE emphasizes the need for a digital pound to provide an alternative to private money in online transactions and seeks public support for this significant decision in the evolution of currency.