UK lawmakers and lords oppose launch of digital Pound amidst rising concerns of stability
|- UK lawmakers have criticized the digital Pound, citing concerns of stability and privacy.
- The Bank of England and Britain's finance ministry plan on holding a formal consultation on a possible Central bank digital currency project.
- Based on a consultation paper, the earliest launch of a central bank digital currency would be in 2025.
Lawmakers in the UK have raised concerns over the negative impact of a central bank cryptocurrency on the economy's stability. A digital pound for everyday use would demand greater assessment.
Digital Pound criticized by House of Lords Economic Affairs Committee
A panel of UK lawmakers criticized the Bank of England's (BoE) initiative to launch a digital currency. A committee of lords and former lawmakers, the House of Lords Economic Affairs Committee, has raised concerns regarding the banking system's stability.
The use of a central bank's digital currency could inject potential privacy concerns and issues of financial stability in the banking system.
Lord Michael Forsyth, a member of the committee, was quoted as saying:
The introduction of a UK central bank digital currency would have far-reaching consequences for households, businesses, and the monetary system. The concept seems to present a lot of risk for very little reward.
The concerns flagged by the committee members imply that the use of digital Pound would be as a form of money for online transactions. Jon Cunliffe, Deputy Governor of the BoE, has increasingly emphasized on the need for a central bank digital currency.
The report put forward by the committee states that the use of CBDC could increase surveillance of consumer spending by private firms. Further, it would shift the balance of the banking system.
The use of a digital Pound would drive a drop in the use of cash for daily transactions. Digital Pound would imply money is controlled by private companies. Based on the central bank's report, the earliest use of the CBDC is 2025.
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