Deputy Governor of the Bank of England, Jon Cunliffe, stated that the UK will likely need to create a digital version of the pound in the upcoming years to continue to be involved in the money that people use daily.
In his last speech before concluding his term at the central bank, Cunliffe stated that no decisions have been made regarding the development of a central bank digital currency, or CBDC, which has been dubbed “Britcoin” by the newspapers.
In the text of a speech given on Thursday at a US Federal Reserve conference, Cunliffe stated, “On current trends, the Digital Pound in the form we have proposed is likely to be needed by the end of the decade. The picture may look very different in two to three years’ time when a decision is due to be taken.”
Adhering to topics related to payment systems, he didn’t cite inflation or interest rates in the text. Cunliffe concludes his tenure before the BOE’s upcoming rate announcement on November 2. Treasury and the BOE are examining 50,000 replies to their request for comments regarding a CBDC.
Cunliffe said, “The only form of state money available to the public at present – physical cash – is declining in use and usability.” He added, “My view is that it is likely to be necessary to issue central bank money in digital form to support confidence in money, particularly in stress, and to ensure the singleness of money.”
Cunliffe stated that private businesses would be involved in a digital pound. The BOE would deliver the central infrastructure, which would include the core ledger used to track currency ownership. Private companies would offer wallets and payment services, acting as an interface between users and the BOE’s infrastructure.
He added, “We do not want to prevent such innovation, provided – and this is a very, very important ‘provided’ – the risks can be managed.”