The Digital Pound: Insights from the Bank of England and HM Treasury’s Response to UK CBDC Consultation Feedback
On 25 January 2024, the Bank of England and the UK Government’s HM Treasury published a?Response?to the Consultation Paper The digital pound: A new form of money for households and businesses?
The Consultation had sought the public’s feedback on the core design of a digital pound, notably seeking views on the platform model and public-private partnership; data protection and privacy; and user experience.
In the context of widespread scepticism across jurisdictions towards Central Bank Digital Currencies (CBDCs), the Response is both revealing of the prevailing cautionary sentiment towards the UK’s CBDC initiative, as well as the approach being taken by the Bank and HM Treasury to mitigate concerns and build support for the project.
Below are the main takeaways from the response.
High public engagement with the Consultation: The Consultation received 51,529 responses from a broad range of stakeholders including the public, businesses, and academia. This is a significant number of responses to a public consultation and reveals the strength of feeling held towards CBDCs (in contrast, HM Treasury’s consultation and call for evidence last year on the UK’s future financial services regulatory regime for cryptoassets received 131 responses).
Societal implications are a significant cause for concern: According to the Bank and HM Treasury, “the majority of the responses commented on the broader societal implications of introducing a retail CBDC” such as the future of cash, privacy, and user rights. There were also concerns about how a digital pound would integrate with existing monetary systems and the impact on cash access and freedom of choice for consumers.
Privacy has proven to be a key point of contention in the development of CBDCs and despite concerted attempts by the Bank and HM Treasury to reassure the public, stating “that a digital pound would be subject to rigorous standards of privacy and data protection”, the Response reveals that scepticism continues. “There was wide agreement that the Government and the Bank should not have access to personal data but many expressed concerns that this would not be adequately implemented or enforced."
An emphasis on a cautious approach: Whilst the Bank and HM Treasury acknowledge the potential future need for a digital pound, they also state that “it is too early to decide whether to introduce the digital pound”. Amid public scepticism towards CBDCs, the Bank and HM Treasury are keen to acknowledge the need for and commit to further public consultation before any definitive decision is made. Additionally, the Bank and HM Treasury state that a move to introduce a digital pound would require parliamentary approval through primary legislation to ensure privacy protection and limit government overreach into personal finances.
Digital pound design: The Response states that "in light of the feedback received, the Bank and HM Treasury think that the design of a digital pound proposed in the Consultation Paper remains appropriate to deliver the Bank and HM Treasury's public policy objectives". While a detailed design is yet to be undertaken, the initial blueprint proposes that private firms would handle customer interfaces, while the Bank would oversee the digital pound's infrastructure and therefore theoretically limit government access to personal data. According to the Consultation, this would give the digital pound “the same (or stronger) privacy protections as bank accounts, debit cards or cheques”. However, as the Response makes clear, there is still widespread scepticism of this principle in implementation.
A vague timeline moving forward: With the digital pound currently in the design phase, the Bank and HM Treasury are evaluating its feasibility, design, and technological capabilities with the Response stating that “transparency around the work and engagement with a diverse group of stakeholders will be more important than ever in the design phase”. The design phase will end with a decision on whether to go ahead with the digital pound and proceed to the build phase of the project. This decision is expected around the mid-2020s at the earliest.
Concluding Assessment
In their Consultation Paper, the Bank and HM Treasury made significant efforts to address concerns regarding privacy and user rights in the context of a potential digital pound. Despite these efforts, the Response shows that such issues remain highly contentious.
The cautious approach taken by the Bank and HM Treasury - favouring exploration over outright commitment to a digital pound - therefore reflects an understandably pragmatic stance amidst the highly contentious debate over CBDCs.
As the design phase of the digital pound progresses and the Bank and HM Treasury seek to address the issues of design, capability, and feasibility, it is important to note that they still face a possibly greater hurdle in shifting the prevailing public scepticism to a more favourable one. Fundamentally, this will require not just rhetorical commitments of privacy and user protection but actual technical design measures to ensure them. Without such guarantees, widespread support for a digital pound remains uncertain.
Applied physics.(JOIN ME) the work presented here is entirely new
1 年If the consolidation of wealth, power in this country is any indication, then the consolidation of control in a digital, programmable currency, will be the end of free societies, and the starting point for this great reset, as referred to in the 2030 agenda. Of course we know this. The folks that brought us overdevelopment of our natural world, (with only thirty percent of our natural world left to supply oxygen to those that would to so breathe oxygen;) the folks that brought us into the pollution age of every major land mass, waterway, from our oceans to our streams and atmosphere; the folks that brought us into the surveillance age and the joint venture of academia, business and government in the development of our high tech industry, will become the targets of a disenfranchised society. Mayhem will not ensue, but simply rejection; rejection of governance; rejection of oversight; rejection of public works; rejection of Federal taxation, agencies and the dissolution of the Federal experiment. A grand return to the farms of old will begin, as it has already begun. Our labor participation rate will rise to 100%, from fifty. Leadership will return. MARK applied physics
Applied physics.(JOIN ME) the work presented here is entirely new
1 年There's truly nothing good about central bank digital currency. Like our now electronic voting system, it is corruptible; programmable and allows for the complete loss of buying freedom; and thus will allow for more human suffering at the hands of a so very few. A central bank digital currency will allow many in our population, to opt out of the digital economy, creating black markets. Finally, a digital currency will create a divide between government & those who would to be governed. 2030 agenda speaks to a far reaching human free zone in America, from Florida to California, across the midwest. Smart cities are in the works, as we have seen in Maui. Maui, it appears, with its' directed energy base on the island, was a test site for this country, practicing & targeting of individual businesses, cars, buildings, leaving adjacent trees untouched. Smart weapons, quantum computing, the targeting of live targets is easy, targeting those with poor social scores (for we know that social scores are not merely something that China produces, but is realized here in the U.S. as well, in a more clandestine setting, for businesses to utilize, and for our gov agencies to score in some ESG nightmare.) MARK applied physics
Applied physics.(JOIN ME) the work presented here is entirely new
1 年A central bank digital currency will be the tipping point of free societies, to emerge from a quasi free state and democracy, to one of totalitarianism. Texas will be the first to secede, followed by Arizona, Utah, Ohio. Texas already has a gold backed depository, the first step toward an independent, Texas currency. Secession will be followed by the formation of militias. A union will dissolve, the great American experiment, will end. Of course, we already suspected that America was never what it seemed, a free, democratic society, with a labor participation rate of fifty percent, was never actually very efficient or productive or effective in caring for the population, its' needy, or realizing success of families or education of our young to be productive members. Each year more and more young people were disenfranchised from society, from family. This great American experiment did not start out so well, as it began in lies and deceit. Giant land grants, provided to big business, allowed for the ownership of medias through bribes and corruption, and the misidentification of a peoples that inhabited this land, originating from Jerusalem ... our lost Tribes of Israel. MARK applied physics