The UK Government Delays Decision on Digital Pound
The United Kingdom is not yet ready to release a digital pound, according to a report analyzing responses from a consultation paper by the Bank of England and His Majesty’s Treasury. The government and central bank have stated that further study is required before considering the implementation of a central bank digital currency (CBDC) in the UK.
A CBDC is a digital currency controlled by a central authority, such as a central bank. Unlike cryptocurrencies like Bitcoin, Ethereum, or Dogecoin, it is not decentralized.
A joint statement from the two bodies clarified that no final decision has been made regarding the pursuit of a digital pound. The government wants to ensure that a digital pound is designed to meet the needs of the public before deciding whether or not to proceed with its development.
Privacy Concerns and Cash Accessibility
The consultation received feedback from approximately 50,000 British individuals, businesses, civil society, and academics. Privacy concerns were highlighted as one of the main reasons for caution in adopting CBDC technology.
The UK government assures that a digital pound would be private but not anonymous, unlike cash. It emphasized that cash will still be available for those who prefer anonymous payment options.
The government has committed to introducing primary legislation with parliamentary votes before launching the digital pound. This legislation aims to protect user privacy and ensure that neither the Bank of England nor the government can control how individuals spend their money.
Global CBDC Exploration
Currently, 130 countries representing 98 percent of global GDP are exploring CBDCs, according to the Atlantic Council’s tracker. China’s digital yuan is leading the way with its advanced development and rollout, including features like digital wallets and salary payments in digital yuan in certain provinces.
A total of 64 countries are in the advanced phase of CBDC exploration, which includes development, pilot projects, or launches.
Hot Take: UK Takes a Cautious Approach to a Digital Pound
The UK government and Bank of England have decided to delay the release of a digital pound. While there is growing global interest in central bank digital currencies, the UK wants to conduct further studies and ensure that a digital pound is designed to meet the public’s needs before proceeding with its development. The consultation paper received feedback from various stakeholders, highlighting privacy concerns as an important consideration. Despite this cautious approach, the UK government emphasizes that a digital pound would not replace cash and individuals would still have access to anonymous payment options. With numerous countries exploring CBDCs, including China’s advanced digital yuan, the global landscape of digital currencies continues to evolve.
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