UK government to reveal digital pound consultation results

The UK government is expected to reveal the results of its consultation on the potential introduction of a digital pound, or central bank digital currency (CBDC), on Thursday.

The consultation, which was launched in February and closed in June last year, sought to gather views from the public, businesses, and stakeholders on the benefits, risks, and design features of a digital pound.

The Bank of England and the Treasury, which jointly conducted the consultation, said at the time that a digital pound could support the UK’s economic recovery, enhance financial inclusion, and foster innovation in the payments sector.

However, they also acknowledged that a digital pound would pose significant challenges for the existing monetary and financial system, such as the impact on commercial banks, the privacy of users, and the security of transactions.

James Bowler, permanent secretary of the Treasury, said in a meeting on Wednesday that the government was proceeding with caution and that there were a number of issues around privacy, financial inclusion, whether there were limits, monetary policy and interest that needed to be addressed.

“The consultation is out on that and you’ll hear more about it tomorrow,” he said.

The consultation received over 50,000 responses, according to the Bank of England. Privacy was one of the chief concerns highlighted by the respondents, who expressed a preference for a digital pound that would protect their personal data and identity.

The Treasury Select Committee, a cross-party group of MPs that scrutinises the Treasury’s policy decisions, also weighed in on the digital pound debate last month. The committee urged the government to lower its proposed limit for individual holdings of the digital pound, which was set at £10,000, and to allow the digital pound to bear interest, which could help stimulate the economy and incentivise saving.

The UK is not the only country exploring the possibility of issuing a CBDC. China, Sweden, and the Bahamas are among the countries that have already launched pilot projects or trials of their own digital currencies, while the European Central Bank and the US Federal Reserve are also conducting research on the topic.

The UK government’s announcement on the digital pound consultation results is likely to spark further discussion and debate on the future of money and payments in the digital age.

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