The central bank of Britain is pushing forward with its CBDC (central bank digital currency) plans with the release of a new consultation paper on the digital pound.
On February 7, the Bank of England and the British Ministry of Finance published a consultation paper on the digital currency of the Bank of England, the “digital pound”. It added that the CBDC would comply with strict data protection and data protection standards. The bank said it would improve data protection through design and enable users to make decisions about their data.
The Bank of England said it was too early to choose a digital pound, but believed that one could be needed in the future.
More Details About The Digital Pound
The document says that the digital pound would be used for retail for households and companies for daily payment needs. It will also be used for purchases in shops and online and is transferable between the parties. The digital pound will exist alongside cash and will be interchangeable with cash and bank deposits. In addition, it can be accessed via smartphones, which indicates that the central bank also develops a digital wallet.
The bank’s admission that cash payments are declining increases its push into the digital economy. The paper revealed that card payments will make up almost 60 % of the payments in Great Britain in 2021, with 32 % of all payments being contactless. However, it is not yet ready to abolish cash, as it is still popular with many citizens.
In addition, the document provides that the Bank of England and the government will not see any personal data. This announcement should dispel concern that CBDCs are used by governments as an instrument for financial surveillance.
In contrast to many Asian countries, non-UK citizens can also use the digital pound. However, the British central bank has decided against decentralized cryptocurrencies, so that this could deter people from them.
According to the Atlantic Council’s CBDC tracker, there are 11 nations that have launched a CBDC, and they are all in the Caribbean, aside from Nigeria. Furthermore, 17 nations are undergoing pilots, and most of them are in Asia.