UK officials have moved ahead with plans for bringing a digital pound to life, with a launch that can happen in the next few years.
Britain’s Treasury and central bank declared that they are aiming to bring a digital pound that could be in use by the late 2020s.
“While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that’s trusted, accessible, and easy to use,” the UK’s chief financial minister Jeremy Hunt said in a statement.
After the announcement, the Bank of England launched a new consultation regarding the design of the UK’s central bank digital currency (CBDC). Before a digital pound can be launched, Governor of the Bank of England Andrew Bailey emphasised that pressing issues like privacy should be addressed.
“As the world around us and the way we pay for things becomes more digitised, the case for a digital pound in the future continues to grow,” Bailey said. “A digital pound would provide a new way to pay, help businesses, maintain trust in money, and better protect financial stability.”
Details regarding a ‘Britcoin’ have yet to be decided, and the central bank hopes to set out any foundations regarding the development of any digital pound with consultation.
As of writing, current plans say that the Government nor the Bank of England would have access to personal data. The private sector is to handle access of the anticipated currency through digital wallets, with initial restrictions for how much an individual or business can hold.
The project will be led by the Central Bank Digital Currency (CBDC) Taskforce, which brings together His Majesty’s Treasury and the Bank of England to explore the potentials of a UK CBDC. While there’s not any clear decisions made in introducing a CBDC in the UK, the Bank of England stresses that “cash remains important to millions of people across the UK, and has committed to legislating to protect access to cash.”
According to the CBDC Taskforce, the CBDC will be considered “a new form of money that would exist alongside cash and bank deposits, rather than replacing them.”
A consultation paper has been published by the Bank of England earlier this week, which has a set of proposals of design choices for the ‘Britcoin.’ Responses to the consultation will be open until 7 June 2023, which then would inform the Bank of England’s future work on the CBDC.
“The digital pound would maintain public access to retail central bank money and, as our lifestyles and the economy become ever more digital, it would also promote innovation, choice and efficiency in domestic payments,” writes the website.
In the consultation process, the Bank of England hopes to speak with businesses and communities in order to assess what impacts a digital pound can bring.
The UK has been anticipating the launch of a CBDC as early as 2021 upon the CBDC taskforce’s inception, then with Prime Minister Rishi Sunak, then Chancellor, teasing a “Britcoin.”
— Rishi Sunak (@RishiSunak) April 19, 2021
Sunak is noted to be quite crypto-friendly. Last year, Sunak asked the Royal Mint to produce an NFT collection as part of bigger plans to bring the UK as a major player in the world’s crypto stage. The Royal Mint’s NFT for Great Britain project is still ongoing, but originally had plans to be issued last summer.
At the same time, the Bank of England and the Treasury have been cooperating on a digital pound since the time of Sunak’s tweet in April 2021.