The Bank Of England Puts Out A Paper About The Digital Pound
With the release of a new consultation paper on the digital pound, the central bank of Britain is moving forward with its CBDC (central bank digital currency) plans.
The Bank of England and the HM Treasury department put out a consultation paper on the “digital pound,” which is a digital currency issued by the UK central bank, on February 7.
It also said that the CBDC would have to follow strict rules about privacy and data protection.
“It would be privacy-enhancing by design and would allow users to make choices about their data,” the bank stated.
The Bank of England said that it was too soon to decide whether or not to launch the digital pound, but they thought that it was likely that a digital pound would be needed in the future.
The paper said that the retail CBDC would be used by both homes and businesses for everyday payment needs. It could also be used in stores and online, and it could be passed from one person to another.
The digital pound will exist along with cash and can be used in the same way as cash and bank deposits. Also, people could use it on their phones, which suggests that the central bank is also making a digital wallet.
The bank admitted that cash payments were going down, which made its push for a digital economy even stronger. The paper showed that close to 60% of payments in the UK will be made with cards in 2021, and that 32% of all payments will be contactless.
But it is not ready to get rid of cash yet because many people still like to use it.
“Around 1.2 million UK adults do not have a bank account and around one fifth of people name cash as their preferred payment method.”
More importantly, the paper said that personal information would not be shared with the Bank of England or the government. This should put to rest any worries that CBDCs are being used by governments to keep an eye on money.
It said that, unlike in many Asian countries, non-UK residents would also be able to use the digital pound.
The UK central bank, on the other hand, is very against decentralized cryptocurrencies, so this could be a way to get people to stop using them.
CBDC Ecosystem Newest
The Atlantic Council’s CBDC tracker says that 11 countries have started CBDCs. All of them, except for Nigeria, are in the Caribbean. Also, pilots are being done in 17 countries, and most of them are in Asia.
Along with 33 other countries, the UK is still in the development phase of its CBDC rollout.
In related news, the Bank for International Settlements (BIS), which is based in Switzerland, said on February 7 that it will put a lot of attention on CBDCs in 2023 to make payment systems better.
