The British authorities, through the voice of their Prime Minister, Rishi Sunak, seem to be moving closer and closer towards the establishment of a central bank digital currency (CBDC). After a joint study published on February 05 between the central bank and the treasury of Her Majesty, the announcement of the said project towards the horizon 2030 was made. However, the Bank of England and Her Majesty’s Treasury will publish consultations on the digital pound of tomorrow very soon.
British CBDC: what prospects for the future?
For jeremy hunt, Britain’s Chancellor of the Exchequer, cash is here to stay. A digital book (CBDC) issued and backed by the Bank of England could be a reliable, accessible and easy-to-use new means of payment.
However, this digital currency will not allow saving or investing from a central bank account. Similarly, the government is announcing limits on the amount allocated to a person or company on private digital wallets.
It is with this in mind that the authorities of the kingdom, including Her Majesty’s Treasury, are preparing regulations for this currency and are announcing a report on the matter which will be published on Tuesday morning.
It is above all a question of a broader regulation of cryptography within the kingdom and of a general consultation to gather the opinions of the populations. Nevertheless, this consultation campaign will continue until June 7th.
In order to allay the concerns of the most skeptical, the report goes into more detail about what a digital sterling may or may not entail.
Moreover, for many Britons, this CBDC would be a ruse by the government to violate their rights and control their spending. In response, the government claimed that while they would not schedule or track spending, the digital pound would not be anonymous to prevent money laundering.
On the other hand, in its design phase of the digital euro, the central bank of Europe is taking a similar approach. Indeed, it indicates the introduction of restrictions on storage and transactions on the European cryptocurrency. With the difference that these different measures will have to change in the future for the British CBDC.
However, the UK government will not make any decision on CBDC issuance until 2025.
Conclusion
In short, the Governor of the Bank of England, Andrew Bailey argues that this consultation campaign added to the work will make the bank form the fundamentals of how Britons use money. In addition, the UK government is working to better regulation of the crypto industry within the kingdom. But especially to the issuance of a country-specific CBDC. Only, prerequisites such as the agreement of the citizens or the studies of the treasury of His Majesty are necessary for the realization of this project. However, the central bank of England promises the use of a CBDC by 2030.
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