February 2024
Dear Constituent,
Thank you for contacting me about CBDC. I have read your email carefully and noted the key points that you have raised.
The Bank of England and HM Treasury have been exploring the concept of a UK retail CBDC or ‘digital pound’. A digital pound would be a new form of digital money for use by households and businesses for their everyday payment needs, and a complement to physical cash and other means of payment. It is important to stress that no decision has yet been made to build or issue a digital pound, either for corporates or for the public.
The Bank of England and HM Treasury Consultation Paper sought feedback from the public on a set of design proposals for the digital pound. Respondents from a range of industries and organisations were supportive of the design proposition set out in the Consultation Paper, while many other respondents raised concerns about the implications of a digital pound for access to cash, users’ privacy, and control of their money.
The consultation response sets outs the steps that the Government and Bank of England are taking to reinforce public trust in the design of a digital pound before any decision is made.
A digital pound would only be introduced once Parliament has passed the relevant legislation, prior to which a further consultation exercise would be held. Privacy, and preventing government programmability, would be a core design feature of the digital pound issued by the Bank of England, and both the Government and Bank of England would not access users’ personal data. Moreover, as you may be aware, the Government has already legislated to safeguard access to cash, ensuring that it would remain available even if a digital pound was introduced.
I would like to reassure you that the Government and Bank of England will continue to engage with parliamentarians, the private sector, civil society, academia and the public to develop proposals for a digital pound.
With best wishes.
Kind regards,
Jonathan Lord MP
Member of Parliament for Woking