The Bank of England and HM Treasury have issued an official response to a consultation concerning the digital pound. At this stage, no definitive decision has been made regarding the pursuit of a digital pound, also referred to as a central bank digital currency (CBDC).

The ongoing efforts will persist in the design phase, focusing on assessing the feasibility and various design options. The exploration aims to understand the potential applications of a digital pound within the UK economy, offering improved choice, convenience, and innovation for households and businesses engaged in everyday transactions. Concurrently, this work aligns with broader initiatives in payment innovation to reinforce the UK's competitive standing as a global leader in finance.

Feedback from diverse industries and organisations has shown overall support for the proposed design outlined in the 2023 Consultation Paper. However, certain respondents expressed concerns about the potential impact of a digital pound on cash access, user privacy, and control over their finances. In response to these concerns, the current publication confirms that, should a digital pound be implemented, primary legislation would be introduced.

This legislation would protect user privacy and control, ensuring that neither the Bank nor the Government would have access to personal data. Users would have autonomy in how they use their digital pounds. Additionally, a further public consultation on a digital pound would precede the introduction of primary legislation, providing both Parliament and the public with additional opportunities to voice their opinions.

Cash-related concerns The publication also reaffirms the commitment of both the Government and the Bank to protect access to cash, even in the potential scenario of a digital pound being introduced. The Economic Secretary to the Treasury emphasised the ongoing national conversation on the future of money, highlighting the commitment to prioritising people's privacy in any design. He clarified that any rollout of a digital pound would complement, not replace, traditional cash.

In turn, the Deputy Governor for Financial Stability highlighted the critical importance of trust in all forms of money. Recognising the significant decision surrounding the introduction of a digital pound, she underscored the necessity of building public and business support for its potential use. Following the design phase, the Bank and the Government will make a decision on whether to proceed with building a digital pound.

If the decision is affirmative, a timetable for further consultation on legislation and a potential launch will be outlined. .