The Bank of England (BoE) announces the launch of its digital pound central bank digital currency (CBDC) project. Dubbed the “new form of money” for households and businesses, the Bank of England and HM Treasury’s official consultation paper sets the pace for the digital pound.
The UK’s CBDC project has been under construction for a while with an anticipated final release. As per the UK CBDC project documents, the central bank would issue the digital currency, accessible to households and businesses via digital wallets.
Breaking the news, Watcher.Guru tweeted:
— Watcher.Guru (@WatcherGuru) February 8, 2023
The BoE’s new form of digital money for use by households and businesses for their everyday payment needs is now in its implementation phase.
As per the UK CBDC project’s consultation paper, the digital pound intends to “sit alongside, not replace, cash.”
It is noted to be a digital currency equivalent to the regular finance systems. The reportedly stated CBDC intention is to “ensure that central bank money remains available and useful in an ever more digital economy.”
In the UK CBDC’s introductory stage, a possible limit exists in the consultation paper pertaining to the CBDC amount that each citizen can hold.
It states, we judge that a limit of between £10,000 and £20,000 per individual is likely to strike an appropriate balance between hanging risks and supporting wide usability of the digital pound.
The consultation paper is also mindful about “private sector innovation,” whilst ensuring the payments’ diversification in the UK. It also states that the development would take place over a period of time (in years).
The paper also specifies that whether or not digital payment is even required in the UK depends upon observing “how the payments landscape evolves in coming years, both in the UK and abroad.”
“It is too early to take the decision on whether to introduce the digital pound,” states the report.
It notes that decision will be made in coming years making account of developments in money and payments and based on our findings as we investigate further operational features and technology, needed to implement it.
