The UK authorities need to be “very clear” about what problems a national digital currency (CBDC) will solve before proceeding with its development. This opinion was expressed by the head of the Bank of England Andrew Bailey, writes Reuters.
Public consultations on the legal attributes of the digital pound will begin in the United Kingdom in the coming weeks. Speaking before a parliamentary committee on January 16, Bailey questioned the need for a CBDC. In his opinion, the country already has an effective wholesale cash settlement system.
“I think the question of whether a wholesale central bank digital currency is needed remains open,” the functionary said.
He added that he is wary of CBDC as a tool for retail use. Bailey pointed to a lack of plans to abolish cash.
“We have to be very clear about what problem we are trying to solve before we get carried away with the technology and the idea,” he said.
Former EU finance ministers supported further work on the digital euro. According to them, the CBDC “should be a pan-European and inclusive project” and complement rather than replace cash.
“Depending on its design, the digital euro could play a key role in an increasingly digital economy. […]while maintaining the role of central bank money as the anchor for our monetary system,” the statement said.
Board of Governors ECB will review the results of the CBDC study in the fall of 2023, after which it will decide whether to proceed to the implementation phase of the project.
In November 2022, the head of the European central bank, Christine Lagarde, said that the digital euro would eliminate the risks of losing financial sovereignty in the eurozone.
In April 2021, the Bank of England and HM Treasury set up a joint working group to look into CBDCs. Later, the Economic Affairs Committee of the House of Lords joined this process.
According to the poll, only 24% of Britons supported the introduction of a digital pound. The greatest concern among citizens was the threat of hacker attacks and violation of privacy.
Recall that in February 2022, the Bank of England called the release of a retail wallet for CBDC “unlikely”.
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