Response to the Bank of England and HM Treasury Consultation Paper: The digital pound: a new form of money for households and businesses?

HM Treasury and the Bank of England have published their response to the digital pound consultation. This document summarises the feedback received in response to the consultation, and details how this will influence the next phase of work.

The feedback received from respondents from a range of industries and organisations was largely supportive of the proposed design set out in 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.

To address these concerns, the publication confirmed that primary legislation would be introduced before the launch of any digital pound. Any such legislation would guarantee users privacy and that neither the Bank of England, nor Government, would be able to control how a digital pound would be used. There will also be a further public consultation on the digital pound prior to the introduction of primary legislation. These commitments would give both Parliament and the public a chance to have their say.

In addition, the Government and the Bank of England have made clear their commitment to maintain access to cash for those who want to use it, even if a digital pound were implemented.

Bank of England and HM Treasury respond to digital pound consultation press notice.

Consultation description

On 1 June 2023, the original deadline for this consultation of 7 June was extended to 30 June due to the omission of the following question from the online response form: Do you have comments on our proposal that non-UK residents should have access to the digital pound, on the same basis as UK residents? (question 9 in the Consultation Paper).

This extension provides respondents (including those who have already submitted a form) with additional time to consider and respond. Further information is available within the Consultation Paper below, or on the Bank of Englands website.

HM Treasury and the Bank of England have published a joint consultation.

The consultation paper sets out analysis by HM Treasury and the Bank of England on the potential case for a UK central bank digital currency a digital pound and consult on the key features of a potential model.

A digital pound would be a new form of digital money for use by households and businesses for their everyday payments needs. As part of the wider landscape of money and payments it would sit alongside, not replace, cash a digital counterpart to familiar, trusted banknotes and coins, subject to rigorous standards of privacy and data protection. This is in line with our ambition that public trust in money remains high, and that modern forms of money and payments meet the evolving needs of individuals and businesses.

Unlike crypto assets and stable coins, the digital pound would be a central bank digital currency or CBDC – sterling currency issued by the Bank of England and not the private sector.

Although it is too early to commit to build the infrastructure for a digital pound, the Bank of England and the Government are convinced that further preparatory work is justified to appropriately respond to the emergence of new technologies, international developments and fresh opportunities. In the four-month consultation period, officials in my department and the Bank of England will engage extensively across the UK to seek views on a potential digital pound. Responses to the consultation are invited from all interested members of the public, experts, and the widest range of organisations.

This consultation is a vital step in positioning the UK to act decisively by introducing a digital pound, should we choose to do so.

____________

Documents

RESPONSE TO THE BANK OF ENGLAND AND HM TREASURY CONSULTATION PAPER: THE DIGITAL POUND: A NEW FORM OF MONEY FOR HOUSEHOLDS AND BUSINESSES? – PDF, 6.48 MB, 72 pages

The digital pound: a new form of money for households and businesses?