UK Steps Up Planning for Digital Pound Currency
Launch of national digital currency (CBDC) is possible this decade, but not before 2025. This was stated by the head of the treasury of Great Britain Jeremy Hunt, writes BBC.
According to the official, e-GBP may become a new "safe and affordable" means of payment. At the moment, the authorities are focused on the impact of CBDC on financial stability.
On Feb. 7, the Bank of England and the Treasury published a consultation paper on the digital pound. Stakeholders will have until June 7 to send their comments.
According to the document, the main motivation behind the launch is to ensure that the British Central Bank's money retains its status as an anchor of confidence and security in the country's monetary system.
Retail e-GBP will find use among the public and businesses for everyday purchases and in e-commerce. The instrument will be available to non-residents.
The document implies a limit on CBDC balances of £10,000 to £20,000 ($12,000 to $24,000).
CBDC will exist along with cash, supplementing them and bank deposits. The CB allowed that e-GBP could affect the business models of banks.
A digital wallet will be developed for storage, accessible through smartphones and payment cards.
The design of the digital pound implies strict privacy and data protection standards - the Bank of England will not have access to personal information.
In a separate white paper, the regulator acknowledged that centrally managed distributed database technologies would be the best fit for the digital pound.
In April 2021, the Bank of England and the Treasury created a joint working group to study CBDC. The House of Lords Economic Affairs Committee later joined the process.
In November, the Central Bank said that after the issuance of the digital pound, 20% of deposits from individuals and corporations could move into the instrument.
In February 2022, the Bank of England called it "unlikely" to issue a retail wallet for CBDC.