You've probably heard of central bank digital currencies, also known as CBDCs. These are digital currencies issued by central banks. Almost all countries are developing CBDCs. This also applies to Great Britain. But in Great Britain people are not entirely sure about the future of the digital pound.
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Is a digital pound necessary?
The Bank of England (BoE) and the British Treasury responded to an advisory article on the digital pound on Thursday. And it seems they are still unsure about the need for a digital currency in the UK. However, the BoE and the UK Treasury say they will continue research into a CBDC.
“The Bank of England and the Treasury believe that further preparatory work is required to respond to developments in the payments landscape and to facilitate steps should a decision to introduce a digital pound be made in the future.”
This is the official answer to the advice article. It also notes that if a digital pound is introduced, it will not be introduced until 2025. The response also states that there are no plans at all to make cash disappear. A digital pound would simply offer an additional payment option.
Concerns about CBDCs
Globally, CBDC developments are experiencing significant setbacks. For example, there are many concerns about privacy issues. For example, there are fears that a CBDC would take away all financial freedom from people and place it in the hands of central banks.
The BoE and Treasury are responding to these concerns, saying new laws that address privacy concerns will come into force before launching a CBDC.
“Trust in any form of money is absolutely necessary. We know that choosing a digital pound in the UK will be a crucial decision for the future of money. It’s important we build trust and have the support of the people and businesses who will use it as we roll it out.”
Trump makes CBDC promises
Also on the other side of the Atlantic, in the United States, notable CBDC news emerged last week. Former President Donald Trump vowed to never approve a CBDC if he becomes president during a campaign speech in New Hampshire. Read all about Trump's special crypto promise in this article.
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