Treasury Committee warns UK digital pound could put financial stability and privacy at risk

investmentweek.co.uk:

The Treasury Committee has argued that benefits of the new asset promoted by the central bank did not outweigh their concerns of overall confidentiality and financial risks.

The Treasury Committee has argued that the benefits of the new asset promoted by the central bank did not outweigh their concerns of overall confidentiality and financial risks.

The BoE's deputy governor for financial stability Jon Cunliffe said last week (27 November), that a digital pound would likely be needed by 2030.

Cunliffe argued a digital currency would help the UK to keep up with other countries developments' around traditional currency alternatives and maintain the public's confidence in money generally.

BoE's Jon Cunliffe: Digital pound likely needed by 'end of the decade'

The government has been reviewing the plausibility and application of a the implementation of a retail Central Bank Digital Currency (CBDC) since last year, when it opened an inquiry into the crypto-asset industry.

In the latest statement, the committee agreed it was important for the BoE and Treasury to remain «open to modernising the use of money in a way which keeps pace with technology while preserving economic stability and individual security».

But chair Harriett Baldwin said this had to be done while making it «clearly evidenced that a retail digital pound will provide benefits to the UK economy without increasing risks or leading to unmanageable costs before any decision is taken to introduce it into our financial system».

Baldwin added that the authorities needed to remain mindful of the unbanked portion of the public.

«We must also keep a close eye on ensuring that any retail digital pound does not worsen financial exclusion for those reliant on physical