UK considers digital pound to complement cash

Guk is considering launching a digital pound. Corresponding plans are currently being discussed with the central bank, the Ministry of Finance announced in London on Tuesday night. A digital one Pound would be issued by the Bank of England, unlike volatile corporate-made cryptocurrencies like bitcoin and ether, and could be used by consumers and businesses for everyday payments both in-store and online. The digital currency would not be introduced until the second half of this decade at the earliest and should not replace cash, but complement it.

“Cash will continue to exist,” said Finance Minister Jeremy Hunt. “A digital pound, issued and backed by the Bank of England, could be a new payment method that is trusted, accessible and easy to use.” Therefore, it is important to explore what is possible while protecting financial stability. A digital pound would be used via the wallet function of a smartphone or a smart card, it said. It serves purely as a means of payment, interest is not paid.

Similar plans also exist in the eurozone. The currency watchdogs there have been examining the possible introduction of a digital version of the European common currency for a while. In mid-July 2021, the European Central Bank (ECB) decided to take the preparatory work to the next level: a two-year investigation phase is now about technology and data protection. An introduction is not expected until 2026 at the earliest. Other central banks around the world are also dealing with digital central bank money.