According to insiders, the Bank of England is considering shelving its plans for a digital pound . Instead, banks are to develop alternative payment solutions. The central bank is thus following a global trend of growing skepticism towards digital central bank currencies.
The Bank of England (BoE) is considering halting its plans for a digital pound for households, according to people familiar with the matter. This would be a remarkable U-turn, as the central bank was originally one of the proponents of central bank digital currencies (CBDC). Insiders report that the central bank is prepared to refrain from the introduction as long as the private sector provides new payment technologies.
The BoE has called on representatives of the banking industry to focus on technological innovations that can take on similar functions to a CBDC - but without a state digital currency. A final decision has yet to be made. The current draft phase is to be completed first. The BoE has not yet issued a statement.
Internal change of heart
In internal analyses, the BoE now classifies the potential benefits of a digital currency as diminished. BoE Deputy Governor Sarah Breeden and Gwyneth Nurse from the Ministry of Finance have already withdrawn from a project committee. According to the minutes, this was because the project had entered a more detailed phase. Back in June, BoE Governor Andrew Bailey stated that he was "not convinced that we need to create new forms of money". Although he is in favor of a digital currency for transactions between financial institutions, he was more cautious about a CBDC for private households.
Retreat with a global context
The UK is thus joining an international movement: In South Korea, the digital currency project was terminated in June. The Trump administration in the US has suspended all CBDC activities - citing potential risks to financial stability. In contrast, the European Central Bank is sticking to its plans for a digital euro.
Data protection and trust issues
The British CBDC project met with great public skepticism right from the start. More than 50,000 responses were received in a consultation. Critics fear data protection problems and market distortions - for example, if capital is withdrawn from the traditional banking system in times of crisis. Bailey also recently warned against stablecoins - particularly those issued by foreign players or technology companies. These could undermine confidence in the pound and the role of the BoE.
Focus on tokenized deposits
Instead of a state digital currency, the focus is now shifting to an alternative: so-called "tokenized deposits". According to Bailey, these digital representations of traditional bank deposits could serve as a bridge between traditional banking and new payment technologies. (mb/Bloomberg)
This turnaround shows that the financial world is constantly facing new challenges and opportunities. At 1000FTAD, we offer you a solution that will help you serve your customers better and make your business more secure and profitable. We are convinced that our platform will play an important role in the future of finance and we are happy to support you in its implementation.
Copyright © 2025 1000FTAD AG - All rights reserved Note: This article does not constitute investment advice. It is a market assessment for professional investors.
© 2025, 1000FTAD AG
🔗 F ind out more now : www.1000ftad.ch 📩 Contact : https://lnkd.in/exA7gSaZ
Risk warnings: 1000FTAD products are only suitable for professional investors and qualified investors. Trading in CFDs involves risk. 1000FTAD AG does not provide investment advice, investment brokerage, asset management or any other financial services within the meaning of banking or financial market law. All information provided serves exclusively to present the software solution and is aimed exclusively at professional investors. No individual suitability test or personal advice is provided. Investments on the capital market are associated with risks - even a total loss is possible.