The Bank of England (BoE) announced on Tuesday that no decision will be made for at least two years regarding the introduction of a central bank digital currency (CBDC) for the British public. This effectively delays the timeline for the so-called “digital pound,” a project initially championed by former Prime Minister Rishi Sunak during his tenure as finance minister in 2021.
While the idea of a digital pound gained early momentum, public consultations revealed widespread concerns about privacy, leading to a more cautious approach by the BoE and the current government. In October, BoE Governor Andrew Bailey expressed skepticism about the necessity of a digital currency, stating that it was “not my preferred option.” However, he acknowledged that it might become essential if traditional banks fail to provide competitive payment systems compared to less regulated tech companies.
The BoE confirmed it is collaborating with Britain’s finance ministry on exploring a potential design for the digital currency. This work aligns with earlier consultation plans and will take into account broader developments in the payments landscape.
“After completing the design phase over the next couple of years, the Bank and government will evaluate the policy case for a digital pound and decide whether to proceed,” the BoE stated. A decision is not expected before 2025.
The government has stressed that a digital pound would prioritize privacy but would not offer full anonymity, unlike physical cash. Similar to bank accounts and credit card payments, authorities would retain the ability to monitor transactions in cases of suspected money laundering or terrorism financing.
The BoE emphasized that legislation would ensure user privacy protections. “Neither the Bank nor the government could access users’ personal information or control how households and businesses use their money,” the central bank assured.