Bank of England Progresses with Digital Pound Project

BoE's Commitment to the Digital Pound

The Bank of England (BoE) remains committed to its digital currency project, according to Deputy Governor Jon Cunliffe. Despite concerns over delays, Cunliffe assured lawmakers that the BoE is progressing on schedule with the digital pound, aligning with efforts by other central banks globally.

Addressing Consultation Delays

Cunliffe addressed the Treasury Select Committee's inquiries about the postponed public consultation initially planned for last autumn. He clarified that the delay was due to disruptions, not a lag in the BoE's strategy. This consultation has now commenced, ensuring the BoE remains competitive in the central bank digital currency (CBDC) landscape.

Current Stage and Future Plans

The BoE's current focus is on studying digital currencies, similar to other major central banks. This study phase is crucial to prevent the dominance of digital payments by private entities. The digital pound, intended to be stored in bank-provided wallets, is targeted for release post-2025.

Disruptions Explained

Cunliffe highlighted disruptions such as the volatility in UK government bond prices following a failed budget, which necessitated BoE intervention in the markets. These events delayed the consultation but did not derail the overall timeline.

Economic and Social Benefits

Cunliffe emphasized the potential economic and societal benefits of the digital pound. However, he noted that competitive aspects must be addressed before its official launch. The digital pound is seen as a tool to enhance financial stability and innovation in the UK economy.

By maintaining a steady course amidst past challenges, the BoE aims to ensure the digital pound becomes a cornerstone of future financial infrastructure.