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The digital pound.

 The UK Treas­ury and Bank of Eng­land are design­ing a «digital pound» that could sup­plant bank­notes by the end of this dec­ade and fend off a Big Tech com­pet­itor.

Bank of England

With the decline of cash, min­is­ters and offi­cials think there is likely to be a need for a pub­licly backed digital cur­rency that would sit in wal­lets on smart­phones and could be used for shop­ping much like notes and coins.

A final decision on whether to go ahead will be taken around 2025, the Treas­ury said, when it would decide whether the bene­fits of imple­ment­ing a new pay­ments infra­struc­ture out­weighed the costs and risks.

One poten­tial danger, flagged pre­vi­ously by the House of Lords and the BoE, is that a new cent­ral bank digital cur­rency could increase fin­an­cial instabil­ity if house­holds and com­pan­ies all with­drew money from com­mer­cial banks at once to put in a gov­ern­ment­backed digital pound.

They think it would help knit together dif­fer­ent private sec­tor pay­ment sys­tems, ran­ging from debit cards to stable­coins.

Andrew Bailey, BoE gov­ernor, said the case in favour of a cent­ral bank digital cur­rency «con­tin­ues to grow». But he cau­tioned that con­cerns needed to be addressed before mak­ing «a pro­found decision for the coun­try on the way we use the money».

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Comments

  1. Felicia7 February 2023 at 12:07

    A digital pound should have already been a thing. It's just because of the banks' fears they will become obsolete that this hasn't happened yet.

    ReplyDelete
    Replies
    1. Cory7 February 2023 at 13:41

      I agree that they need to make sure everyone doesn't just go and take out money from all the banks at the same time. They need to put some stops in place so this doesn't happen. But yes, we need such a digital pound.

      Delete
  2. Aaron7 February 2023 at 15:44

    While there are many dangers to doing something like this there are also many benefits. Everything needs to be thought out and considered properly before proceeding but it seems like the next, logical step.

    ReplyDelete

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