A state-backed digital pound is likely to be launched this decade, according to the Treasury and the Bank of England.
UK Chancellor Jeremy Hunt called the central-bank digital currency (CBDC) a “trusted and accessible” way to pay.
According to The BBC:
But it will not be built until at least 2025.
“We want to investigate what is possible first, whilst always making sure we protect financial stability,” Mr Hunt said.
The Treasury and the Bank of England will formally start a consultation for the digital currency, on Tuesday.
Cryptocurrencies are not backed by a central bank and the value can shoot up and down rapidly.
But while it may use technology similar to cryptocurrencies such as Bitcoin and Ethereum, the digital pound, issued by the Bank of England, would be less volatile. Ten digital pounds will always be worth the same as £10 in cash, the Treasury says.
Though, as holidaymakers will know, the value of the pound does change relative to other currencies.
Prime Minister Rishi Sunak asked the Bank of England to look into backing a currency, in 2021, as chancellor.
And in October 2022, Mr Sunak’s Financial Service Minister Andrew Griffith warned a lengthy delay could create problems for the economy.
The US, China and the European Union are also planning to launch central-bank digital currency’s.
These things happen in lockstep.
When cash disappears it’s game over.
