The Bank of England has officially launched its digital pound CBDC project as a new form of money, for households and businesses. The new initiative and the various features of the digital pound are described in an official consultation paper that was released by the Bank of England and HM Treasury.
The CBDC project from the UK has been in the works for some time, with many anxious about its eventual release. According to the documents, the digital currency would be issued by the nation’s central bank. Households and businesses would access it through digital wallets.
The digital pound will complement established financial institutions as a digital currency, not as a replacement for them, as stated in the project’s consultation paper.
Moreover, stating the intention of the CBDC is to ensure that central bank money remains available and valuable in an ever-more digital economy.
During the introductory phase of the CBDC, the consultation paper notes a potential limit on the amount held by each citizen.
It states, “We judge that a limit of between £10,000 and £20,000 per individual is likely to strike an appropriate balance between hanging risks and supporting wide usability of the digital pound.”
The paper makes note of “private sector innovation,” amidst the benefits of the diversification of payments in the UK.
Additionally, noting that the development would be one that would occur over a matter of years. Stating the decision of whether digital payment in the country is even needed would only come through observation of how the payments landscape evolves in coming years, both in the UK and abroad.
The report also stated that it is too early to take the decision on whether to introduce the digital pound.
The statement further noted, “That decision will be made in coming years making account of developments in money and payments and based on our findings as we investigate further operational features and technology required for its implementation. “
Conclusively, the idea of a CBDC in the UK is still way away, but the launching of the program is still a massive feat for the digital asset industry.