United Kingdom Introducing the Digital Pound
The Central Bank of England and the UK Treasury are exploring the possibility of launching a digital pound, aimed at providing a more stable alternative to cryptocurrencies like Bitcoin and Ethereum. A consultation paper has suggested that a digital pound could be introduced by 2030, subject to restrictions on consumer transfers to prevent rapid outflows from traditional banks.
Limitations on Individual Holdings
In order to balance usage and risk management, limitations on individual holdings of the digital pound would apply at least during the initial phase. The authorities have emphasized that the stability of the financial system is their top priority.
Disagreements on the Implementation of the Digital Pound
There have been differing opinions on the introduction of the digital pound, with former Bank of England governor Lord King among those who have expressed concerns over the potential risks of the new form of money. However, final decisions on its implementation will not be made until 2025.
Value Equivalent to Physical Pound
The digital pound would have no interest and be equivalent in value to the physical pound. For example, £10 of a digital pound would be worth £10 in cash in the UK. The Bank of England has spent millions of pounds researching the economic benefits of a Central Bank Digital Currency (CBDC) and is dedicated to making a well-informed decision for the country.