Bank of England Says Digital Pound CBDC Could Protect Consumers

The Bank of England (BoE) believes a digital pound, also known as a central bank digital currency (CBDC), could offer vital protections for consumers in an increasingly digital world. This announcement signifies a crucial pivot in the UK’s financial landscape, as Governor Andrew Bailey and his team prepare for a future where digital money could become legal tender, meaning it could be legally used just like cash, but exclusively online.

Protecting Consumers in a Digital Payment Landscape

Specifically, Bank of England Deputy Governor Jon Cunliffe has emphasized how a retail central bank digital currency (CBDC) could help maintain the singleness of money in an increasingly digitalised payment landscape. This stable and well-regulated digital currency would offer a safe alternative to privately issued cryptocurrencies and stablecoins, potentially mitigating risks for consumers.

The IRSG's Perspective on the Digital Pound

The IRSG welcomes the opportunity to respond to the Bank of England's (BoE's) Consultation Paper (CP) on the case for a central bank digital currency (CBDC). In summary, IRSG is analyzing the proposals and providing valuable insights into the design and implementation of the digital pound.

Exploring the Offline CBDC

As part of the Bank of England’s central bank digital currency (CBDC) design phase, it explored an offline CBDC for its digital pound. At this stage, it was only interested in examining the potential for a system where users could transact without an internet connection, further enhancing accessibility and resilience.

The UK's Digital Future is Here

The Bank of England's move towards developing a retail central bank digital currency (CBDC) could offer a secure, regulated, and accessible digital payment option for consumers, paving the way for a more modern and inclusive financial system in the UK.