By
Tolu Ajiboye
April 17th, 2024
Despite the widespread consultations on the subject, the project is not yet ready.
Following a three-year collaboration, the Bank of England (BoE) and the United Kingdom’s Treasury are ramping up plans for a digital pound.
In April 2021, prime minister Rishi Sunak formed the Central Bank Digital Currency Taskforce comprising the BoE and Treasury. The assignment of the task force included researching the development and possible implementation of the digital pound.
Following the latest development, the duo plans to publish a joint consultation paper on Central Bank Digital Currencies (CBDCs) while seeking public feedback. The public consultation will continue till June 7. In the meantime, the Treasury will begin work on necessary technology and policies for implementation.
Assuaging public concern, Finance Minister Jeremy Hunt noted that the BoE and the Treasury would modernize digital payments without replacing cash use. Hunt said, “While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay.”
Hunt believes the digital pound will be accessible and easy to use. Similarly, BOE Governor Andrew Bailey believes a digital pound will help organizations build trust and protect their financial state.
Digital Pound May Launch by 2025.
Despite the widespread consultations on the subject, the project is not yet ready. Should BoE and Treasury proceed with plans, the CBDC and any underlying blockchain technology will not be introduced until 2025.
According to Governor Bailey, “this consultation and the further work the bank will now do will be the foundation for what would be a profound decision for the country on the way we use money.” For now, BoE Deputy Governor Jon Cunliffe will update the finance industry on the progress of the task force. The UK Treasury also announced an open position for the Head of CBDC.
The release of the joint consultation paper follows the latest UK government report on crypto regulation. The new regulatory framework published by the Treasury suggests stricter rules for investing and trading. The framework seeks to establish a regulatory framework for crypto service providers, lending platforms, crypto issuances and disclosures, and much more.
While various crypto actors received the proposal well, they have to submit responses to the proposed regulatory framework by the end of April.