Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Britain yet to make the case for a digital pound, lawmakers say

Published Dec 02, 2023 00:07 Updated Dec 02, 2023 15:51
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The Bank of England is seen reflected on a balloon with the pound symbol during a protest against the hiking of interest rates outside the Bank of England in London, Britain, August 3, 2023. REUTERS/Susannah Ireland/File Photo
 
GBP/USD
+0.02%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Huw Jones

LONDON (Reuters) -A digital pound should not be available in large sums initially to avoid the risk of bank runs, British lawmakers said in a report on Saturday that also highlighted the need to safeguard cash and user privacy.

The Bank of England and finance ministry have said an electronic form of the pound is likely in the second half of the decade, as 130 countries consider similar moves to keep abreast of technological advances in payments.

But lawmakers on the Treasury Select Committee said in their report that while a digital pound might bring benefits in terms of boosting innovation, the BoE and Treasury should keep an open mind on whether it is actually needed, given the costs involved.

"It must be clearly evidenced that a retail digital pound will provide benefits to the UK economy without increasing risks or leading to unmanageable costs before any decision is taken to introduce it into our financial system," committee chair Harriett Baldwin said.

People and businesses could use a digital pound to make payments, with the BoE suggesting a limit of up to 20,000 pounds for digital wallets provided by banks, far higher than the 3,000 euros discussed by the European Central Bank for a digital euro.

The committee's "The digital pound: still a solution in search of a problem?" report said there should be a smaller limit initially to mitigate a bank run triggered by a switch in large amounts of deposits into digital wallets in times of market turmoil - and risk bumping up the cost of loans.

The prospect of a digital pound, now in the design phase, has raised concerns that it would allow authorities to spy on how people spend and that it could spell the end of cash.

"We recommend that any primary legislation used to introduce a digital pound does not allow the Government or Bank of England to use the data from a digital pound for any purposes beyond those already permitted for law enforcement," the report said.

The BoE has said interest should not be payable on digital pound deposits, but the committee said this position should be reviewed.

The Treasury and the BoE said in a joint statement that they would formally respond to the committee's report in due course and would set out the next steps in a consultation paper.

"We have always been clear a digital pound would only ever be introduced alongside cash, and that protecting individual privacy is paramount in any design," they said.

Britain yet to make the case for a digital pound, lawmakers say
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Vincenzo Tilotta
Vincenzo Tilotta Dec 02, 2023 19:45
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Digital BS. Stop wasting taxpayers' money, citizens do not want to be spied on. Death to all CBDCs
Lee PH
Lee PH Dec 02, 2023 1:11
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Reset the West responsibilities for their fiscal obligations.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email