The UK continues to show its desire for a digital pound, just as its companies try to limit access to Bitcoin.
The Bank of England and the UK Treasury have released a consultation document outlining their case for a retail central bank digital currency (CBDC) or “digital pound”. The document has been reviewed by the Bank and Treasury CBDC working group, which was established in April 2021.
Although the bank is still considering whether to introduce the digital pound, it believes that the preparatory work is warranted. If introduced, the digital pound would be a form of sterling that households and businesses would use for their everyday payments. The Bank of England and the UK Treasury will engage with stakeholders across the country to get their views on the proposed model, according to the announcement.
Simultaneously, a road map presented by Governor Andrew Bailey and Chancellor Jeremy Hunt detailed their goal of avoiding a bank run.
according to a telegraphic report, the two officials have said that consumers will be prevented from hoarding the new digital pounds issued by the Bank of England. To avoid large and quick outflows from traditional banks, Brits will limit themselves to transferring a few thousand digital pounds into their accounts. The fluid nature of digital money is apparently seen as a potential risk to the stability of the traditional banking system. The consultation document mentioned above indicated that this limit could potentially be £10,000.
Just as these developments are taking place, bank CEOs in the UK are blocking customer access to cryptocurrencies due to fraud and volatility concerns, according to reports. The executives appeared before the Treasury Select Committee to discuss the issue.
Alison Rose, CEO of NatWest Group, told the committee that the bank had taken a “pretty hard line” on cryptocurrencies due to the stability and volatility of the platforms and the risk of fraud. Social media and technology platforms were cited as the main source of fraud, but executives also expressed support for proposed new regulations by the UK Treasury.
All of these events indicate the ability of the UK government, with the help of major corporations, to lock its citizens into financial compliance with strict regulation on the use of each private citizen’s money. The UK continues to move towards lockdown and restriction of the bitcoin and cryptocurrency industry, while pursuing a CBDC system that would perform the worst projections for that technology.
