The Bank of England in the belief that the digital pound will be needed in the future has launched an assessment for the CBDC (digital pound) contained in a consultation paper published by the Bank of England and HM Treasury. The consultation paper highlights that the digital pound is a new form of money for households and businesses.
Jeremy Hunt, Chancellor of the Exchequer Conservative, a few months earlier before the consultation paper was released said “consultations will start soon to explore the case for a central bank digital currency.”
In April 2021, a CBDC task force, joint Bank-HM Treasury was formed to oversee the digital pound, and currently, the CBDC is been considered for assessment. “We are convinced preparatory work is justified,” however, the decision to introduce a digital pound is yet to be made, the consultation paper stated.
In comparison, the digital pound would be like a new Sterling, functioning as a digital banknote, and issued by the Bank of England. According to the consultation paper, the digital pound, “if introduced, would exist alongside, and be easily exchangeable with, cash and bank deposits.”
The utility of the digital pound would border around payments for everyday needs for households and businesses, and sending money to family and friends. Additionally, transactions would be made in-store and online.
The digital pound will not lose public access to retail central bank money and will promote domestic payment choices and efficiency as well as bring about innovation.
The Bank of England will consult with stakeholders across the UK on the digital pound and their views will be taken into account by both the HM Treasury and the Bank of England.
The apex bank in the country welcomes responses from the public on the consultation to inform their joint future work. The responses will be received until 7 June 2023.
Bank of England in December made a call on the UK government digital marketplace asking for a “proof of concept” wallet that can store Central Bank Digital Currency (CBDC). The UK Treasury as well is on the lookout for a head of CBDC amidst its digital pound consideration.
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