The UK government will bring forward a consultation on the case for a central bank digital currency (CBDC) "in the coming weeks," Chancellor of the Exchequer Jeremy Hunt said on Friday. The Bank of England (BOE) will also release a paper that sets out technology considerations informing the potential build of a digital pound, Hunt said in a written statement to Parliament.
Hunt announced these plans as part of a wider set of reforms to spur the UK's financial services industry.
Recommended For You
BOE officials led by Deputy Governor Jon Cunliffe have become increasingly vocal about the need for so-called central bank digital currencies, which would give consumers and businesses a form of money that's as safe as cash but usable in online transactions.
They note that a sharp drop in the use of cash is leaving money increasingly controlled by private companies that don't have the explicit government guarantee carried by banknotes and coins.
However, a UK parliamentary panel said earlier this year that officials have given no convincing reason it is needed. The House of Lords Economic Affairs Committee, which includes former BOE Governor Mervyn King, said at the time that introducing a CBDC might threaten the stability of the banking system and inject the BOE into controversial debates on privacy. One concern is that it could allow the state to have greater surveillance of people's spending choices.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
