Bank of England and HM Treasury Address Digital Pound Concerns Amidst Public Interest

Public Engagement and Over 50,000 Responses

The Bank of England and HM Treasury have responded to the public consultation on the potential introduction of a digital pound, acknowledging the significant interest from the public and industry experts. With over 50,000 responses received, concerns related to privacy, control of funds, and the availability of traditional cash were highlighted.

Privacy and Control Assurances

In response to these concerns, the authorities have emphasized the implementation of robust legislative measures to ensure user privacy and control before any digital pound rollout. Primary legislation will be enacted to safeguard personal data, ensuring neither the Bank of England nor the government has access to users' personal information.

Digital Pound as a Supplement, Not Replacement

The digital pound is positioned as a complement to existing forms of money, rather than a replacement. Economic Secretary to the Treasury, Bim Afolami, affirmed a commitment to prioritize people's privacy in any design, clarifying that the digital pound would exist alongside traditional cash, not instead of it.

Trust and Support from the Public

Sarah Breeden, Deputy Governor for Financial Stability, emphasized the importance of building trust in all forms of money. She highlighted that gaining the support of the public and businesses is crucial for the potential introduction of a digital pound.

No Final Decision on Digital Pound

As of now, no final decision has been made to pursue the digital pound, also known as a central bank digital currency (CBDC). The ongoing work involves exploring feasibility and potential design choices for a digital pound in the UK economy. The focus is on enhancing choice, convenience, and innovation for everyday payments.

Coexistence with Cash and User Protections

The digital pound is envisioned to coexist with cash in the digital era, offering an alternative for everyday transactions. Issued by the Bank of England, the proposed digital currency aims to be convenient, widely available, and easily exchangeable with other forms of money. It is intended for transactions rather than savings, with initial restrictions on the amount individuals or businesses can hold.

Detailed Legislative Processes and Future Consultations

Before the launch of a digital pound, detailed legislative processes and further public consultations are planned. The proposed design has received positive feedback, but concerns about access to cash and control over personal data have led to a commitment to introduce primary legislation for user protection. The legislation will also prevent government interference in programming the digital pound.

Parameters and Global Accessibility

The Bank of England proposes a holding limit of £10,000-£20,000, subject to future reviews. The digital pound is expected to be accessible in multiple countries, excluding those under sanctions. Real-world experiments and additional public consultations are in the pipeline to test the digital pound in various scenarios.

In Conclusion:

The Bank of England and HM Treasury respond to public concerns regarding the digital pound, assuring stringent legislative measures for privacy and control. Emphasizing that the digital pound will complement traditional cash, the authorities prioritize building trust and gaining public support. No final decision has been made, with ongoing exploration of design choices and feasibility. The digital pound is envisioned to coexist with cash, providing an alternative for everyday transactions, and detailed legislative processes and public consultations are planned before any potential launch.