16.1 C
London
Monday, May 27, 2024

Bank of England Confirms CBDC Launch By 2025

Must read

The Bank of England and HM Treasury are launching a consultation into a retail central bank digital currency (CBDC), a “digital pound” which is to be launched by 2025.

The joint consultation paper published on Tuesday sets out analysis by HM Treasury and the Bank of England on the potential case for a UK central bank digital currency.

The key features of a proposed digital pound include:

– Digital Wallets provided by the private sector
– Programmability only controllable by users not government
– Restricted amounts initially
– Available for UK residents & non- UK residents
– Interest free
– Not Anonymous
– Daily use
– Personal Data Not Available (Except to law enforcement)
– For Personal & Business Use

Prime Minister Rishi Sunak asked the Bank of England to look into backing a currency, in 2021, when he was the UK Chancellor. And in October 2022, Mr Sunak’s Financial Service Minister Andrew Griffith warned a long delay could create problems for the economy.

Although the UK has an efficient payment system the Bank of England Governor Andrew Bailey said:

“As the world around us and the way we pay for things becomes more digitalised, the case for a digital pound in the future continues to grow. A digital pound would provide a new way to pay, help businesses, maintain trust in money and better protect financial stability.”

He further stated:

“However, there are a number of implications which our technical work will need to carefully consider. This consultation and the further work the Bank will now do will be the foundation for what would be a profound decision for the country on the way we use money.”

Chancellor Jeremy Hunt said the central-bank digital currency (CBDC) could be a new “trusted and accessible” way to pay. But it will not be built until at least 2025.

“We want to investigate what is possible first, whilst always making sure we protect financial stability,” Mr Hunt said.

Cryptocurrencies are not backed by a central bank and the value can go up and down rapidly but the digital pound would be a central bank digital currency or CBDC – sterling currency issued by the Bank of England and not the private sector.

- Advertisement -

More articles

- Advertisement -

Latest article