Reportedly the United Kingdom (UK) is looking to enhance its efforts on the development of the Central Bank Digital Currency (CBDC), or say Digital Pound.
The Central Bank Digital Currency (CBDCs) is a concept that came after the popularity of stablecoins in the Crypto market. In the present time, the majority of the Central Banks are studying & developing a perfect model of CBDC to replace the traditional financial system with a better one. To this date, China & Nigeria are top in the CBDC adoption rate.
On 4 Feb 2023, Daily Telegraph reported that The Bank of England (BoE) and His Majesty’s Treasury are at the stage where they think the United Kingdom needs to increase its efforts & create a CBDC, or say Digital Pound, by 2030.
A government source told the media that BoE will release an update on “Digital Pound” by next week. The report noted that Deputy Governor Jon Cunliffe will give an update on the Central Bank’s progress on CBDC on 7 Feb.
BoE Governor Andrew Bailey and Chancellor of the Exchequer Jeremy Hunt told:
“Based on our work to date, the Bank of England and HM Treasury judge that it is likely a digital pound will be needed in the future.”
The officials from the Bank of England refused to comment on this report but confirmed that the Bank will release a joint consultation on CBDC soon.
As per reports, people in the UK are showing very less inclination toward cash or coin payments. Only 1 out of 6 people prefers to use online payments via Credit card, debit card, or direct bank transfer.
CBDC & fear
In the last few months, it has been seen that a few Central Banks showed their disappointment with the concept of CBDCs.
Few banks noted that CBDC Introduction may reduce the potential control of the Central Bank and in that case, the Bank will lose its dominance on the economy of the country at some significant level.
Some Central Banks noted that they are not able to tackle the technical challenges and in that case, CBDC failure will result in a financial disaster, which should not be part of any financial system.