The British government and the Bank of England (BoE) have announced that they will study the possibility of introducing a digital currency in the United Kingdom, known as the British Pound, which will not replace the cash but rather “complement” it.
In a speech during Fintech Week, Economy Minister Rishi Sunak announced the creation of a unit between the Treasury and the banking corporation “to coordinate exploration work on a potential central bank digital currency”.
In a statement, the Bank of England, which is governed by Andrew Bailey, in turn, indicated that a public consultation period would be opened to identify “benefits, risks and practical issues” to promote this “central bank’s digital currency. (CBDC, for its English acronym)”.
The bank stated in its memo: “The central bank’s digital currency will be a new form of digital money issued by the Bank of England for use by households and companies (…) that will coexist with cash and deposits and will not replace them.” .
The banking corporation, founded in 1694, indicated that although it was “not decided yet” whether the UK would own a digital currency, the business unit would study, among other things, its potential design and terms of employment.
The unit, which will also oversee similar initiatives internationally, will be chaired by the Deputy Governor of the Bank of England for Financial Stability, John Cunliffe, and the Chief Financial Officer of the UK government’s Treasury, Catherine Braddick.
Central banks in many countries are currently considering issuing digital money, partly to facilitate financial transactions on technology platforms, but at present, only the Chinese digital yuan is in the testing phase.
European Central Bank President Christine Lagarde recently said that the European Central Bank may have a digital currency “in the next four years”.
The European Central Bank has indicated to the European Parliament that it will decide in the coming months whether to initiate a “formal investigation phase” into the digital euro.
Once this stage is completed, the European Central Bank will decide the design and suitability to implement the requirements that have been identified for users, a phase that will last “several years”. At the end of that, the European Central Bank will decide whether to launch the digital euro or not.