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A digital currency is likely to be needed, says U.K. Treasury and Bank of England

The U.K. government said Monday that a digital currency is likely needed, as countries around the world examine the changing nature of payments.

A statement issued by both the U.K. Treasury and the Bank of England said they were seeking comments, though they said no decision has yet to be taken. The consultation will run through early June, and a decision about whether to implement a digital pound will be taken around the middle of the decade. The earliest stage at which the digital pound could be launched would be the second half of the decade.

The financial authorities said they envision a digital pound as having equivalent value to existing cash.

“As the world around us and the way we pay for things becomes more digitalized, the case for a digital pound in the future continues to grow. A digital pound would provide a new way to pay, help businesses, maintain trust in money and better protect financial stability,” said Bank of England Gov. Andrew Bailey in a statement. U.K. Chancellor of the Exchequer Jeremy Hunt made a similar comment.

The authorities said a digital pound would be issued by the Bank of England, and that neither the government nor the central bank would have access to personal data. It would be accessed through digital wallets offered to consumers by the private sector through smartphones or smartcards.

Other countries including the U.S. are considering similar proposals, though the Federal Reserve officials have expressed skepticism around the idea though they continue to study it. Fed Gov. Christopher Waller said the dollar’s role as the dominant currency has little to do with technology.

“A U.S. [central bank digital currency] is unlikely to dramatically reshape the liquidity or depth of U.S. capital markets. It is unlikely to affect the openness of the U.S. economy, reconfigure trust in U.S. institutions, or deepen America’s commitment to the rule of law,” said Waller in a speech in October.

That said, the New York Fed has been testing central bank wholesale digital money with institutions including BNY Mellon, Citi and Mastercard.

Two-thirds of central bank respondents to a survey conducted by the Official Monetary and Financial Institutions Forum found they expect to issue a central bank digital currency in ten years. Benefits include a broadening of access to financial services and improving cross-border payments, the survey found.


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Jake

Jacob Keiter is a husband, a writer, a journalist, a musician, and a business owner. His journey to becoming a writer was one that was paved with challenges, but ultimately led him to find his true calling. Jacob's early years were marked by a strong desire for creative expression. He was always drawn to music, and in his youth, he played in several bands, chasing the elusive promise of fame and success. However, despite his best efforts, Jacob struggled to find the recognition he craved. It wasn't until he hit a low point in his life that Jacob discovered his love for writing. He turned to writing as a form of therapy during a particularly difficult time, and found that it not only helped him to cope with his struggles, but also allowed him to express himself in a way that he had never been able to before. Jacob's writing skills quickly caught the attention of others, and he soon found himself working as a journalist for The Sun out of Hummelstown. From there, he went on to contribute to a variety of publications, including the American Bee Journal and Referee Magazine. Jacob's writing style is reflective of traditional journalism, but he also infuses his work with a unique voice that sets him apart from others in his field. Despite his success as a writer, Jacob also owns another business, JJ Auto & Home, which specializes in cleaning. Jacob's commitment to excellence is evident in all of his endeavors, whether it be in his writing or in his business ventures. Today, Jacob is the author of two books and continues to inspire others through his writing. His journey to becoming a writer serves as a reminder that sometimes our darkest moments can lead us to our greatest achievements.

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