Bank of England Releases Paper for a Digital Pound

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More and more countries are jumping on the crypto train, and the UK may be the latest in a long line. More specifically, the Bank of England has just released a consultation paper which outlines the case for a digital British Pound. After Brexit, the government has been actively pursuing the pound instead of the Euro, and talks about a CBDC have been going on for a while. But, it’s all been talk so far, with no paper or any legal information. Thanks to the new paper, the digital pound is finally entering reality.

The CBDC Taskforce was launched in April 2021. It was just reviewing the market so far and learning how the digital pound can be implemented. Many believed it was just a pipe dream, but the consultation paper makes it very real.

Still Consideration

While the paper was just released, it doesn’t mean the digital pound has come to life. Right now, things are very much in consideration, but as long as the framework is done, the digital pound may live. It would be a virtual, digital form of the sterling that can be used by individuals and businesses for daily payments.

As part of the consultation paper, the Bank of England and UK Treasure will engage with stakeholders around the country and gather opinions on the proposed model. It’s great that the central bank is taking time to see what others think of the digital pound, instead of just going its own way.

Governor Andrew Bailey and Chancellor Jeremy Hunt detailed how this isn’t a run on banks. Consumers will be prevented from hoarding the digital pound, preventing rapid outflows from the UK’s traditional banks. How will that work? Well, for now, no person will be allowed to transfer more than a few thousand digital pounds into their wallets. According to the paper, this limit might be £10,000, but it’s open to further changes.

Arriving at Just the Right Time

The latest move is happening just as bank CEOs across the UK are preventing their customers’ access to cryptocurrencies. It’s part of a larger scheme that includes concerns over volatility and fraud, something that has been a recurring idea.

For example, the NatWest Group is taking a very hard line approach to cryptocurrencies. The bank is concerned by the volatility and all the frauds that involve Bitcoin and the likes. The primary sources of fraud were technology and social media, with some banks citing the UK Treasury’s new regulations as another problem.

However, it’s pretty clear that banks just hate cryptocurrencies. The government and banks/major companies want to control the capital of people and push them into financial obedience. It’s a clear plan that will be invoked with strict regulation about how they might be able to use the digital currency. According to experts, things are pretty clear. With the plans for a CBDC, the UK is hell-bent on restriction Bitcoin and crypto, while pursuing a system that’s the exact opposite of what cryptocurrencies bring.

February 8, 2023: • No Comments

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