Bank of England mulls shelving of digital pound

Finextra

2 days ago

The Bank of England is considering shelving plans for the creation of a digital pound amid growing scepticism over the project's benefits.
0
The BofE has been privately urging the banking industry to instead accelerate payment innovations that could result in similar benefits without the creation of a central bank digital currency, or CBDC, for consumers, according to anonymous sources cited by Bloomberg.
The sources said the central bank wants to be in a position to launch a CBDC if it is eventually warranted. But it is willing to step back if private businesses continue to roll out new electronic-payment technologies, and its staff believe the gains from pressing ahead with a digital pound launch have diminished.
The central bank in Janaury announced plans to open a Digital Pound Lab that would set out the blueprint of a design phase for a future Bricoin.
At the time, the Bank offered a cautious assessment of the project's mertis: "As is the case with all our work during the design phase, no decision has yet been taken on whether to build a digital pound. Design notes do not represent final policy or design decisions, nor do they represent policy proposals upon which we are formally consulting.
"On completion of the design phase and taking account of evolutions in the wider payments landscape, the Bank and the Government will decide whether to proceed to build a digital pound.
The Bank's current thinking is in stark contrast to that taken by the European Central Bank, which is accelerating work on a digital euro to keep up with the "ambitious pace" set by EU leaders as the project's urgency increases in the face of geopolitical challenges including an increasingly hostile United States under Donald Trump.
In its third progress report on the preparation phase of a CBDC, the ECB acknowledges that since its last update in December, there has been an increased push from the continent's leaders to reduce its reliance on Visa and Mastercard.
Remarking on the progress report, ECB executive board member Piero Cipollone says: "We are pleased to see that our efforts remain on track as we keep working to deliver on the request of EU leaders to accelerate progress on a digital euro. In light of today's geopolitical and economic challenges, we welcome an ambitious pace for the legislative work."