On 25 January 2024, the Bank of England (BoE) and HM Treasury (HMT) published their response to the consultation on a ‘digital pound’, which was launched in February 2023 and received over 50,000 responses. In the response they confirmed that no final decision has been made to pursue a digital pound, also known as a central bank digital currency (CBDC).

The BoE and HMT gave the following updates:

  • Work will continue during the design phase, exploring feasibility and potential design choices. This will include considering how a digital pound could be used in the UK economy to provide greater choice, convenience and innovation for households and businesses making and accepting everyday payments.
  • The feedback received was largely supportive of the proposed design as set out by the consultation paper, while other respondents raised concerns about the implications of a digital pound for access to cash, users’ privacy and control of their money.
  • In addressing these concerns, the response confirms that if a digital pound were to be implemented, primary legislation would be introduced in order to safeguard users’ privacy and control. There would be a further public consultation on a digital pound before primary legislation is introduced, to give Parliament and the public further opportunities to have their say.

The publication also reiterates the commitment of both the Government and the BoE to protect access to cash, even if a digital pound were introduced. In the BoE’s press release, Deputy Governor for Financial Stability, Sarah Breeden acknowledged that it is essential to build trust and have the support of the public and businesses who would be using it if introduced.

Following the design phase, the BoE and the Government will decide whether or not to build a digital pound and, if they do choose to proceed, they will set out a timetable for further consultation on legislation and a potential launch.