Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

Rick Steves

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

The Bank of England and HM Treasury published a Consultation Paper that sets out their assessment of the case for a retail central bank digital currency (CBDC) – a so-called ‘digital pound’.

The digital pound would be a new form of sterling, similar to a digital banknote, issued by the Bank of England. It would be used by households and businesses for their everyday payments needs. It would be used in-store, online and to make payments to family and friends. If introduced, it would exist alongside, and be easily exchangeable with, cash and bank deposits.

The digital pound would maintain public access to retail central bank money and, as our lifestyles and the economy become ever more digital, it would also promote innovation, choice and efficiency in domestic payments.

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the official announcement.

Following the joint announcement from Bank of England and HMT on the consultation ‘The digital pound: a new form of money for households and businesses’, a number of crypto asset organizations have come forward to comment on the matter.

Ian Taylor, Board Advisor at trade association CryptoUK, said: “We welcome today’s news that the Bank of England and His Majesty’s Treasury has announced a roadmap to a digital pound. This will bring the UK in line with the European Central Bank and a growing number of forward-thinking nations including many G7 countries, which are exploring the benefits of this payment instrument.

“We look forward to discussing the positive impact a UK central bank digital currency (CBDC) could have on financial inclusion, stability and operational efficiency in an increasingly cashless society with policymakers and regulators. We will also look for opportunities to collaborate with other associations here in the UK and globally, and connect with other jurisdictions in the process of developing and implementing their own CBDC solutions.”

Bradley Duke, co-CEO at ETC Group, stated: “Crypto and Central Bank Digital Currencies are completely different animals, but they are often lumped together because they both use blockchain technology. CBDCs such as the Digital Pound will likely be completely centralised and possibly dystopian in nature, while leading cryptocurrencies such as Bitcoin and Ethereum envisage a freer world filled with innovation and opportunity.”

Chris Ford, Head of Government Affairs EMEA at enterprise blockchain firm R3, said: “The Treasury’s plan to investigate the design of a digital pound is a significant moment for our cutting edge fintech sector and demonstrates the UK government’s serious intent about putting technology at the heart of our financial services industry. Regulated CBDC, built on distributed ledger technology, can enhance efficiency across our financial market infrastructure and solve real problems that have held us back for decades.

“Following last week’s proposals to regulate crypto assets, it is clear that the government sees DLT as a core pillar through which it can drive financial innovation. Amidst rising competition from Europe and elsewhere, the application of blockchain and related technologies will be key in ensuring the UK retains its status as a global hub for financial services.”

Read this next

Digital Assets

CFTC Charges Binance and Its Founder, CZ, with Willful Evasion of Federal Law

The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Changpeng Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations.

Institutional FX

Macau announces MCEX exchange for institutional exposure to China’s micro and small businesses

One issue that can’t be overlooked, however, is how transparent can these cash flows be, given the reality of parallel economies in micro and small businesses. 

Digital Assets

Sphynx Ink and OpenSea Partner for “Winkles & Flam” Digital Collectibles

Sphynx Ink Inc. is launching Winkles & Flam, the first cartoon duo in the web3 space, with original hand-drawn art and educational content focused on video game history.

Industry News

Titanium Blockchain CEO sentenced to 4 years in prison for $21m crypto scam

He did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for his Hawaii condominium.

Industry News

First Citizens acquires Silicon Valley Bank’s deposits and loans

Technically, First Citizens is acquiring Silicon Valley Bridge Bank, National Association, an entity created by the FDIC following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation.

Industry News

FXDD named “Most Transparent Broker – Europe” for 2022

Continuing its winning streak, leading brokerage firm FXDD has won the “Most Transparent Broker – Europe” award – granted by the Awards 2022.

Industry News

The UTIP has launched a reseller program, opening new opportunities to maximize profits

The UTIP Technologies Ltd.  is underway to launch a reseller program. A purpose of the program is to attract new partners, boost a brand awareness and create a unique offer for forex brokers. This allows the reseller to buy and integrate attractively priced UTIP products with their own solutions and expand a range of products for their clients.


Fxview Sheds Light on Technology Enablement

Traders gain control over their activity and capital with low-latency execution.

Digital Assets

Haru Invest secures EU passport via VASP license in Lithuania

“Haru Invest has been growing stronger than ever, even during the volatile market situation, so we are very keen on crypto regulations. Obtaining a VASP registration is one of many milestones for our company, and it will help build trust in the crypto industry for our members by providing secure and compliant digital asset management services.”