UK Chancellor Jeremy Hunt says digital pound could launch after 2025

The launch of a national digital currency (CBDC) could occur this decade, but not before 2025. This was stated by the UK’s Treasury chief Jeremy Hunt, reports the BBC.

According to the official, e-GBP could become a new ‘reliable and accessible’ payment instrument. At the moment, authorities are focused on the impact of the CBDC on financial stability.

On 7 February, the Bank of England and the country’s Treasury published a consultation paper on the digital pound. Stakeholders will be able to submit their comments by 7 June.

Today the Bank of England and @hmtreasury have published a Consultation Paper on the digital pound, a UK central bank digital currency. Find out more here: https://t.co/jISyz0kvtb pic.twitter.com/KhYOY0Dlaz

— Bank of England (@bankofengland) February 7, 2023

According to the document, the primary motivation for the launch is to ensure that Bank of England money preserves its status as a trusted and secure anchor in the country’s monetary system.

Retail e-GBP will be used by individuals and businesses for everyday purchases and in e-commerce. The instrument will be available to non-residents.

The document envisages a cap on CBDC holdings ranging from £10 000 to £20 000 (about $12,000 to $24,000).

CBDC would exist alongside cash, complementing cash and bank deposits.

The central bank acknowledged that e-GBP could affect banks’ business models.

A digital wallet will be developed for storage, accessible via smartphones and payment cards.

The design of the digital pound envisages strict privacy and data-protection standards — the Bank of England will not have access to personal data.

In a separate техническом документе, the regulator acknowledged that centrally managed distributed ledger technologies are best suited for creating the digital pound.

“The Bank will not implement programmable features. The regulator could provide the private sector with the necessary infrastructure to implement them in the users’ interests, which would require the latter’s consent,” the document states.

In April 2021 the Bank of England established a joint working group to study the CBDC. Later to this process the House of Lords’ Economic Affairs Committee joined.

In November, the BoE said that after the launch of the digital pound up to 20% of deposits held by individuals and corporations could move into the instrument.

In February 2022 the Bank of England described as ‘unlikely’ the release of a retail wallet for the CBDC.

Earlier in January 2023, Bank of England Governor Andrew Bailey doubted the need for creating a digital pound.