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British authorities will not decide until next year at the earliest on whether to go ahead with a state-backed digital pound that would provide an alternative to payments operated by banks and technology companies.<\/p>\n
The Bank of England and Britain\u2019s finance ministry said they would continue preparatory work following a public consultation which drew 50,000 responses, many raising privacy concerns.<\/p>\n
\u201cNo final decision has been made to pursue a digital pound \u2013 also called a central bank digital currency,\u201d the BoE and finance ministry said in a joint statement.<\/p>\n
\u201cThe Bank and HM Treasury have progressed to the design phase of work on a digital pound and expect to decide whether to proceed to the build phase around the middle of the decade.\u201d<\/p>\n
Prime Minister Rishi Sunak was an early supporter of the idea, calling on the BoE to start work on the project in 2021 when he was finance minister.<\/p>\n
However, even if the project does get a go-ahead, it is unlikely to be operational until near the end of the decade.<\/p>\n
Under the proposals, Britons would be able to hold electronic pounds \u2013 with the same value as physical cash \u2013 up to a limit of 10,000 to 20,000 pounds ($12,700-$25,400). Like cash, the money would not pay interest.<\/p>\n
Banks had lobbied for a lower limit of 3,000 to 5,000 pounds, fearing the project could lead to an outflow of money from standard bank accounts.<\/p>\n
Last month, British lawmakers said the case for digital cash had not been made. Other central banks, including the European Central Bank and the US Federal Reserve, are also wrestling with privacy issues.<\/p>\n
The European Union\u2019s legislation for underpinning a digital euro has been slowed by privacy concerns, prompting the bloc\u2019s financial services chief Mairead McGuinness to say last year that it was not a \u201cBig Brother project\u201d.<\/p>\n
Britain says a digital pound would be private but not anonymous, unlike physical cash.<\/p>\n
As with existing bank accounts and credit card payments, authorities would be able to track transactions they suspect involve money laundering or finance terrorism.<\/p>\n
\u201cA digital pound would not replace cash, so the public would continue to have access to an anonymous payment option,\u201d the BoE and government said in their response to the consultation.<\/p>\n
The use of physical cash is dwindling in Britain and the BoE has said a state-backed digital option could provide alternatives to existing bank payments or separate payment systems which large technology companies might develop.<\/p>\n
Legislation would be put in place to ensure privacy following further consultation if the project goes ahead, the government said, adding it also planned further public consultations.<\/p>\n
The digital currency would not allow the government to program it in a way which blocked holders from making certain transactions, a concern of some privacy advocates.<\/p>\n
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\nCyprus Mail on Google News<\/p>\n","protected":false},"excerpt":{"rendered":"
British authorities will decide no earlier than next year on the potential implementation of a state-backed digital pound. The Bank of England and Britain’s finance ministry are continuing with the design phase after a public consultation that received 50,000 responses, with privacy concerns being a prominent issue. No final decision has been made to pursue a central bank digital currency (CBDC), and a decision on whether to proceed to the build phase is expected around the middle of the decade.<\/p>\n
Prime Minister Rishi Sunak supported the idea when he was finance minister in 2021, but the digital pound would likely not be operational until near the end of the decade if approved. Proposals suggest that individuals could hold electronic pounds up to a limit of 10,000 to 20,000 pounds, without earning interest. Banks have advocated for a lower limit due to concerns over potential outflows from traditional bank accounts.<\/p>\n
British lawmakers have not yet been convinced of the necessity for digital cash, and privacy issues are also a concern for other central banks, including the European Central Bank and the US Federal Reserve. The European Union’s progress on a digital euro has been hampered by similar concerns.<\/p>\n
The UK government states that a digital pound would be private but not anonymous, allowing for the tracking of transactions suspected of involving money laundering or financing terrorism. However, it would not replace physical cash, ensuring continued access to an anonymous payment option. The government also plans to ensure privacy through legislation and further public consultations if the project advances. The digital currency would not be programmable to block specific transactions, addressing some privacy advocates’ concerns.<\/p>\n","protected":false},"author":3,"featured_media":2482,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[47,611,195,461,186,189,78,79,33,350,3,599,51,52,569,518,250,415,187,382,494,380],"class_list":["post-2481","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-bank-of-england","tag-banks","tag-britain","tag-british","tag-business","tag-businesspick","tag-cbdc","tag-central-bank-digital-currency","tag-companies","tag-cryptocurrencies","tag-cyprus","tag-euro","tag-european-central-bank","tag-federal-reserve","tag-finance","tag-finance-minister","tag-google","tag-government","tag-international","tag-terrorism","tag-uk","tag-us"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n