The Bank of England (BoE) and the Treasury will next week unveil a roadmap for building a Central Bank Digital Currency (CBDC). The Telegraph report The BoE and the Ministry of Finance are considering starting a four-month consultation, in which businesses, academia and the general public will be invited to share their views on the launch of the “digital pond,” the report said. increase.
A digital pound is being considered due to declining use of cash in the UK. Cash now accounts for only 15% of all transactions in 2021, compared to over 50% in 2011.
Citing a consultation paper that has yet to be published, The Telegraph reported that BoE Governor Andrew Bailey and Treasury Secretary Jeremy Hunt believe the UK is “likely” to need a CBDC. Bailey and Hunt stated in a consultation paper:
“Based on the work to date, the Bank of England and the Treasury have determined that a digital pound will likely be needed in the future.”
The development comes nearly two years after Prime Minister Rishi Sunak set up a task force as prime minister to decide whether the UK should create a CBDC.
According to the advisory document, Bailey and Hunt believe it is “premature” to work on building the infrastructure for the CBDC, but they are “convinced” that further work is “justified.”
According to the report, the BoE and the Ministry of Finance will begin the “design” phase of the CBDC project, creating a blueprint for how the digital pound will be built and used.
The report said the CBDC would take years to create, with officials believing 2025 would be the “earliest” the BoE could start building and testing prototypes. However, a final decision on whether to issue digital pounds will not be made until then. A CBDC will also require significant public investment, according to the report.
According to reports, the digital pound could be launched by 2030 if it gets final approval. The BoE has previously said the UK is expected to launch a CBDC “in the second half of the decade”.
