Benzinga - The Bank of England has put forward a proposal to launch a digital currency that would be solely issued by the central bank that could be used by households and businesses for their everyday payments, allowing individuals to access their funds via a digital wallet accessible through smartphones or cards.
"A UK central bank digital currency — a 'digital pound' — would be a new form of digital money for use by households and businesses for their everyday payments needs," Bank of England Governor Andrew Bailey said.
The potential digital currency would be issued solely by the central bank and would be accessible through digital wallets, which would be anonymized on the central bank's ledger to address privacy concerns.
The currency would be non-programmable, meaning authorities cannot control how people spend their money.
The Bank of England has proposed an initial limit of £20,000 on the amount any individual can hold, to manage the risks of deposits flowing out of the banking system.
"On the basis of our work to date, the Bank of England and HM Treasury judge that it is likely a digital pound will be needed in the future," he said. "It is too early to commit to build the infrastructure for one, but we are convinced that further preparatory work is justified."
The consultation period will last four months, during which HM Treasury and the Bank of England will extensively engage across the U.K. to seek views on the potential digital pound.
Responses to the consultation are invited from the public, experts, and organizations.
The Bank of England has also published a separate working paper on the technological design considerations for a digital pound, such as privacy, security, and resilience.
"At this exciting time of change in money and payments, this consultation is a vital step in positioning the UK to act decisively by introducing a digital pound, should we choose to do so," he said.
Next: Is Baby Doge Coin The Next Big Thing In Dog-Themed Cryptocurrencies? Price Jumps 92% In A Week
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.