The UK government has finished its review of the proposed central bank digital currency, the “digital pound,” following the collection of more than 50,000 responses from individuals and organizations.
The Treasury and the Bank of England conducted a consultation to seek input on the idea of introducing a digital version of the British pound specifically designed for retail transactions
On Wednesday, James Bowler, Permanent Secretary to the Treasury, said that the government is proceeding carefully with the digital pound plans. “There’s a number of issues around privacy, financial inclusion, whether there’s limits, monetary policy and interest and the consultation is out on that,” he remarked.
Key concerns raised in the responses included privacy protections, financial inclusion, programmability, and the potential to apply interest rates. The Treasury Select Committee asked for lower limits on individual holdings and interest-bearing capabilities.
The February 2022 consultation paper recognized the need for a digital pound to “support innovation and competition in payments” and underpin confidence in money. However, the committee stated that the problem it aims to solve remains unclear.
After reviewing the feedback, the government and the Bank of England must determine if the challenges highlighted can be sufficiently addressed before deciding whether to develop a digital pound.
“This is about being a modern economy that recognizes how our citizens want to do business but throws up some challenges you’d want to overcome before you decide to proceed. We are still in that phase of looking at those challenges,” remarked Bowler.
Also Read: Fed’s Bowman Questions Need For US CBDC
