The Digital Pound - A New Form of UK Money?
Published by Campbell M Gold in Political · Sunday 11 Aug 2024
Tags: Digital, Pound, UK, Money, Bank, of, England, HM, Treasury, Consultation, Paper, Policy, Technical, Work, Feedback, Decision, Launch, Future
Tags: Digital, Pound, UK, Money, Bank, of, England, HM, Treasury, Consultation, Paper, Policy, Technical, Work, Feedback, Decision, Launch, Future
The Digital Pound: A New Form of UK Money?
Response to the Bank of England and HM Treasury Consultation
Paper: The digital pound: a new form of money for households and
Businesses?
Presented to Parliament by the Economic Secretary to the Treasury
by Command of His Majesty
January 2024
It seeks feedback on the policy and technical work undertaken so far to inform a future decision on whether or not to progress with building and launching a digital pound and on the current proposal for its form and functions, which will be taken forward in the next stage.
The digital pound is an electronic version of cash issued by the Bank of England. It would be like a digital form of money, similar to banknotes, but accessible through digital wallets provided by companies. If introduced, it wouldn’t replace physical cash; instead, it would offer more payment options.
- Central Bank Digital Currency (CBDC): The digital pound is a type of central bank digital currency (CBDC). Unlike cryptocurrencies, which are privately issued, the digital pound would be issued directly by the Bank of England and backed by the government.
- Stability and Trust: Just like banknotes, the value of the digital pound would be stable. For example, £10 in digital pounds would always have the same value as a £10 banknote. Trust in the digital pound would be essential, and future laws would guarantee users’ privacy and prevent control over spending.
- Choice and Coexistence: If introduced, the digital pound would coexist with physical cash. People could choose whether to use it or not. The Bank of England would continue to issue cash for as long as people want to use it.
- Consultation and Design: In early 2023, the Bank of England published a Consultation Paper exploring the need for a digital pound. Over 50,000 responses were received, and the Bank published a response in January 2024. The next steps involve a design phase to assess technology and policy requirements.
Overall, the digital pound aims to maintain trust in money, protect the financial system, and enhance payment efficiency while providing more options for consumers and businesses. The earliest possible issuance would be in the next 5 to 10 years.
Jan 2024
https://assets.publishing.service.gov.uk/media/6478bd0cb32b9e0012a9609a/CBDC_WEB_PDF_-_1_JUNE_2023_4.20pm.pdf
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