The Bank of England (BoE) is reportedly reassessing its central bank digital currency (CBDC) project amid rising doubts about its effectiveness. According to sources familiar with internal discussions, the UK central bank may cancel its digital pound plans if commercial banks deliver sufficient payment innovation without requiring a state-backed alternative.
Digital Pound Plans Face Resistance
The BoE previously stated in 2023 that a digital pound was “likely needed in the future”, but recent comments suggest a shift. Governor Andrew Bailey told the UK Treasury Committee that he would require “a lot of convincing” to proceed with a CBDC if private payment systems prove successful.
“If that’s a success, I question why we need to introduce a new form of money,” Bailey said.
This statement reflects a broader trend where governments are growing cautious about digital currency experiments, especially when potential benefits remain unproven.
CBDC Privacy and Stability Concerns Grow
More than 50,000 public responses, mostly critical, were submitted during a recent consultation phase. Key concerns include:
- Potential invasion of privacy through transaction tracking
- Destabilizing effects during financial crises, such as bank runs
- Dominance of foreign stablecoins or Big Tech tokens over the British pound
These issues have attracted criticism from lawmakers and suspicion from privacy advocacy groups, intensifying scrutiny of the project.
UK CBDC Development Lags Behind Global Peers
The Atlantic Council’s CBDC tracker indicates that the UK remains in the early development phase, well behind other regions. Currently:
- Only 3 countries (Bahamas, Jamaica, Nigeria) have launched CBDCs
- 49 countries are in pilot testing
- 20 countries are actively developing
- 36 countries remain in research mode
Despite global momentum, CBDC adoption remains slow, with governments weighing risks versus innovation opportunities.
US Legislative Push Against CBDCs
The United States recently passed the Anti-CBDC Surveillance State Act, which blocks the Federal Reserve from launching or testing any CBDC without explicit Congressional approval. This follows rising fears that government-backed digital currencies could enable mass surveillance and erode financial freedom.
Final Decision Still Pending
While no final decision has been announced, the UK’s central bank appears more inclined to support private-sector-led payment solutions. With mounting public and political resistance, the future of the digital pound remains uncertain.
This development signals a global slowdown in government-backed digital currency rollouts, as central banks rethink their roles in an evolving financial ecosystem.
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