UK is 'likely' to need digital currency, says BoE and Treasury: Report
The Bank of England (BoE) and Treasury believes the United Kingdom is likely to need to create a central bank digital currency (CBDC) by 2030, according to a Telegraph report on Feb. 4.
The "digital pound" roadmap is set to be introduced next week, a government source told the newspaper. Deputy Governor Jon Cunliffe is scheduled to give an update on the BoE's work on the CDBC on Feb. 7
"On the basis of our work to date, the Bank of England and HM Treasury judge that it is likely a digital pound will be needed in the future," noted Governor Andrew Bailey and finance minister Jeremy Hunt to the Telegraph.
The BoE declined to comment on the article, but announced that a joint consultation on the digital pound would be released soon.
The UK reportedly experienced a 35% drop in cash and coin payments in 2020. Cash accounts for approximately one in six payments; debit and credit cards account for the other five. A central bank digital currency is a digital version of fiat currency, tied to fiat reserves at a 1:1 ratio, allowing citizens and businesses to manage funds far more efficiently and affordably.
Related: What are CBDCs? A beginner's guide to central bank digital currencies
The news comes just a few days after the UK's economic and finance ministry posted on LinkedIn an open position for a head of central bank digital currency. The job description presented the role as “important, complex, and cross-cutting”, requiring an “extensive engagement across and beyond the HM Treasury.”
The digital pound is one of many CBDCs expected to be introduced across the world in the years ahead. The European Central Bank (ECB) has been discussing the future of a digital euro, and several countries, including Sweden and Denmark, have also begun exploring the concept of digital currencies.
CBDC pioneer, China's digital yuan was launched in beta last year for iOS and Android local app stores. Recent developments include upgrades to smart contract functionality alongside a series of use cases, Cointelegraph reported.