Exploring the Feasibility of Digital Pound: Bank of England and HM Treasury Prioritize Privacy and Control
Summary:
The Bank of England (BoE) and HM Treasury are exploring the feasibility and principles of a central bank digital currency (CBDC) in response to a consultation launched in February 2023. While the final decision on the creation of a digital pound is yet to be made, their focus is on safeguarding "privacy and control" and "protecting access to cash". The digital pound, or 'Britcoin', could possibly be launched no earlier than 2025. Despite the anticipatory atmosphere, the lack of clarity and firm direction is causing frustration among the crypto digital asset businesses and enthusiasts in the UK.
The Bank of England (BoE) and the UK's HM Treasury have offered their insights on the prospect of a central bank digital currency (CBDC), following a consultation initiated in February 2023. Their primary emphasis will be on preserving "privacy and control". Despite not making a final decision about the introduction of a digital pound yet, they are dedicated to investigating the practicality of a CBDC, as well as potential formats. In addition, both institutions have expressed a desire to safeguard the availability of physical money should they decide to launch a CBDC, thereby adding a new payment option for residents.
The BoE clarified that should a digital pound come into existence, primary legislation would ensure user privacy and control. It also reassured that neither the Bank nor the Government would have access to personal data, granting users autonomy in utilising their digital currency.
The UK government has been urging both BoE and HM Treasury for more insight regarding the potential costs relating to the implementation of a CBDC. Many UK citizens have expressed concerns that the introduction of a digital pound may result in government monitoring of financial transactions and privacy infringements. CryptoUK's spokesperson voiced a request for more comprehensive information from the Government and BoE, specifically with regard to a more well-defined action plan and schedule regarding the digital pound's future.
The BoE and HM Treasury anticipate the introduction of the digital pound, colloquially termed 'Britcoin', no earlier than 2025, should they commit to the CBDC proposal. However, no concrete decision has been made to issue it yet. Hence, whilst crypto digital asset businesses and enthusiasts in the UK are eager for regulatory clarity, the current ambiguity risks fostering uncertainty and dissatisfaction.
Meanwhile, in the United States, the idea of a digital dollar has the potential to become a contentious issue in the upcoming 2024 Presidential Election. And though former U.S. President and current GOP front-runner Donald Trump has voiced his rejection of the idea, citing the need to "protect Americans from government tyranny", the topic is likely to remain on the political agenda.
Published At
1/25/2024 6:52:10 PM
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