After working together for the past three years, the Bank of England and the Treasury of the United Kingdom are stepping up their efforts to develop a digital version of the pound.
The Bank of England and the Treasury were both members of the Central Bank Digital Currency Taskforce when it was established in April 2021 by Prime Minister Rishi Sunak. The task force explored (1) the possibility of developing and implementing the digital pound, which was part of their mandate.
In light of the most recent turn of events, the two parties intend to issue a joint consensus statement on Central Bank Digital Currencies (CBDCs) while simultaneously soliciting views from the general public.
There will be a continuation of the public consultation through June 7th. In the interim, work will get underway at the Treasury Department on the required regulations and technologies for implementation.
Finance Minister Jeremy Hunt addressed the public's concerns by stating that the Bank of England and the Treasury will improve digital payment methods without eliminating cash usage.
Hunt believes that while the traditional currency will continue to be the main stray, a digital pound issued and supported by the Bank of England might be a new method to pay while acknowledging that cash will continue to be used.
Hunt is certain that the digital pound will be readily available and simple to operate. Similarly, the Governor of the BOE, Andrew Bailey, thinks that introducing a digital pound will assist firms in establishing confidence and safeguarding their financial position.
Digital Pound Could Debut in 2025
Despite the numerous conversations that have taken place on the topic, the product still needs to be prepared. If the BoE and Treasury decide to move forward, the CBDC and any supporting blockchain technology won't be implemented until 2025.
According to Governor Bailey, "this counseling and the additional operation the bank will now be the basis for what will be a significant decision for the nation on the way that we use money."
For the time being, BoE Deputy Governor Jon Cunliffe will provide an update on the progress made by the task group in the financial industry. Additionally, the UK Treasury published an available post for the Head of CBDC.
After the publication of the most recent report on cryptocurrency regulation by the UK government, the joint consultation document was made available. The new legal framework announced by the Treasury argues that stronger restrictions for trading and investing should exist.
The framework aims to develop a regulatory regime for crypto providers, lending networks, crypto issuances and disclosures, and many other aspects of the cryptocurrency industry.
Even if numerous crypto players have positive reactions to the plan, they have till the end of April to provide replies to the regulatory framework that has been presented.