The Bank of England is thinking about cancelling its plans for a central bank digital currency, according to people familiar with the matter who spoke to Bloomberg. These insiders say the bank’s leaders are now unsure whether a digital pound would truly benefit the UK’s financial system.
Instead, BoE officials are quietly urging commercial banks to speed up their own digital payment solutions rather than rely on a government-issued digital currency.
“If that’s a success, I question why we need to introduce a new form of money. Moving forward with a CBDC would require a lot of conviction.”
Governor Andrew Bailey
The Governor Takes a U-Turn
This is a big change from what Governor Andrew Bailey said in 2023, when he claimed that “a digital pound will be needed in the future.” At the time, the Bank of England was working closely with the UK Treasury on the project.
According to the Atlantic Council, the UK’s digital pound is still officially in the development stage. No final decision has been made yet.
The project has faced many problems. It got strong criticism from some members of Parliament and over 50,000 mostly negative public comments during the consultation. The biggest concerns are about people’s privacy and the risk that a digital pound could hurt the banking system during a financial crisis.
There are also worries about foreign or Big Tech companies launching their own stablecoins, which could weaken the global position of the British pound.