UK Government Considers Digital Pound Consultation
The UK Parliament and the Bank of England (BOE) are discussing the potential need for a state-backed digital pound or Central Bank Digital Currency (CBDC). The government plans to launch a digital pound consultation to assess the challenges around CBDCs. Privacy concerns and risks to the banking system have been expressed by the UK government regarding the potential launch of a retail CBDC. While there is ongoing research, concrete plans for launching a CBDC in the UK are not yet in place. The final decision will depend on the findings from the design phase of the CBDC and how the payments landscape evolves.
Launch of Britcoin Could Take Years
The head of the BOE’s CBDC project, Tom Mutton, stated that research on building a digital pound, known as Britcoin, is still ongoing. He mentioned that it could take until the second half of this decade for an eventual CBDC to be launched. The Bank of England is considering different versions of ledgers for its CBDC, including public blockchains similar to those used for cryptocurrencies like Bitcoin.
Trump’s Criticism of CBDCs
Former US President Donald Trump recently spoke out against CBDCs, describing them as a “dangerous threat to freedom.” The US has shown skepticism towards CBDCs, and there is no urgency in developing one according to UK parliament reports. Views on a retail CBDC in the UK remain mixed.
Hot Take: Is a Digital Pound on the Horizon?
The UK government is considering the possibility of launching a state-backed digital pound or CBDC. While there are ongoing discussions and research, concrete plans have not yet been established. Privacy concerns and risks to the banking system are factors being taken into account. The launch of a digital pound could still be several years away, depending on the findings from the design phase and the evolution of the payments landscape. Former US President Donald Trump has criticized CBDCs, adding to the mixed views surrounding a retail CBDC in the UK.
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