On February 7, the Bank of England and Her Majesty’s Treasury Department published a consultation paper on the “digital pound”, a digital currency of the UK central bank.
He added that the CBDC would be subject to rigorous privacy and data protection standards.
“It would improve privacy by design and allow users to make decisions about their data,” the bank stated.
The Bank of England said it was too soon to decide on the launch of the digital pound, but considered one likely to be needed in the future.
Today the Bank of England and @hmtreasury have released a consultation paper on the digital pound, a UK central bank digital currency. Learn more here: https://t.co/jISyz0kvtb pic.twitter.com/KhYOY0Dlaz
— Bank of England (@bankofengland) February 7, 2023
The British digital pound is coming
The retail CBDC would be used by households and businesses for daily payment needs, the document noted. Furthermore, it would be used in stores and for online purchases and would be transferable between the parties.
The digital pound will exist alongside cash and will be interchangeable with cash and bank deposits. Furthermore, it would be accessible via smartphones, suggesting that the central bank is also developing a digital wallet.
The bank recognized that cash payments were on the decline, exacerbating its push for a digital economy. In 2021, card payments accounted for around 60% of UK payments and 32% of all payments were made contactless, the newspaper revealed.
However, it is not ready to phase out cash just yet, as it is still popular with many citizens.
“About 1.2 million UK adults don’t have a bank account and around a fifth of people list cash as their preferred method of payment.”
More importantly, the document stipulated that the Bank of England and the government would not see any personal data. This statement should allay fears that governments are using CBDCs as financial surveillance tools.
Unlike many Asian nations, the digital pound would also be available to residents outside of the UK, he claimed.
However, the UK central bank is vehemently against decentralized cryptocurrencies, so this could be a push to turn people away from them.
CBDC Ecosystem Latest
According to the Atlantic Council’s CBDC Tracker, there are 11 countries that have launched a CBDC, and they are all in the Caribbean, apart from Nigeria. Additionally, 17 nations are experimenting with pilots, and most of them are in Asia.
The UK is still in the development phase of its CBDC implementation along with 33 other countries.
In related news, the Swiss-based Bank for International Settlements (BIS) Announced on February 7 that will heavily focus on CBDCs in 2023 to improve payment systems.
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