The UK should not be left behind in rapid financial innovation, the UK Financial Services Secretary announced yesterday, May 10, as it moves closer to deciding “when, not if” to issue a digital version of the pound sterling.
The Treasury and the Bank of England launched a public consultation in February to pave the way for a potential digital pound that is likely to enter circulation in the second half of this decade.
Although a final decision has not yet been made, British Financial Services Minister Andrew Griffiths said yesterday that the UK must accept changes in payments and not stem the tide.
“We wouldn’t take the time to consult if we didn’t think we were getting close; “We’re not there today, but we’re getting close to the point where it’s a matter of when, not if,” Griffith declared at an event held by the OMFIF think tank.
According to Griffiths, the UK should not be left behind in global payments innovation, as cashless payment methods account for 85% of payments and are on the rise.
“We envision the digital pound working in a similar way to the physical pound: it will be a safe and reliable form of money,” Griffiths said.
However, Griffiths explained that digital currencies backed by fiat money will be launched before the digital pound, regulated by rules that are approved in Parliament.
Digital euro
Several countries are paving the way for a digital version of their currencies, while the European Union will soon publish a draft law that would lay the legal foundations for a digital euro, if introduced.
In this regard, officials from the European Central Bank said that they do not want to keep any personal data of their users.
But critics say a digital version of the euro could be used to snoop on citizens’ activities and make it difficult to use cash to make payments and purchases.
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