- The UK government has announced that a decision on a Central Bank Digital Currency (CBDC), referred to as “Britcoin,” will be made in the next two to three years
- HM Treasury’s report, published recently, outlines considerations for planning the CBDC, incorporating feedback from around 50,000 respondents
- Key concerns raised include privacy and the possibility of the government imposing Britcoin on the public
A decision on whether to make a UK Central Bank Digital Currency (CBDC) will be made within the next two to three years, the government has said. In a report published yesterday, HM Treasury outlined the considerations that will have to be taken into account in its planning and discussing its findings from a recent call for public opinions on the CBDC, dubbed “Britcoin.” Around 50,000 members of the public, businesses, civil society, and academics gave responses to the consultation, with the key concerns being over privacy and the potential for the government to force Britcoin onto the public.
Government Still on Track for 2025 Decision
The British government revealed last year that a CBDC could be in place by the end of the decade and earmarked 2025 as the year when it would likely make a decision on the matter. This timetable still seems to be in place, with yesterday’s report noting that The Bank of England and HM Treasury have “progressed to the design phase of work on a digital pound and expect to decide whether to proceed to the build phase around the middle of the decade.”
The report outlined what the design phase will involve:
Work during the design phase will focus on developing in detail the digital pound proposition, with a particular focus on the operational, functional and technology model for a digital pound. That will involve determining the technological feasibility and investment required to build and operate the digital pound infrastructure. In turn, that will support an overall assessment of the costs and benefits of building and running the digital pound architecture.
The report added that the decision following this period will “draw on extensive engagement with stakeholders across all of society throughout the design phase, as part of the development of the digital pound’s blueprint.
Privacy Tops User Concerns
The report was keen to point out that the design phase is not the design of the CBDC itself and added that will “present enduring benefits for the digital economy in the UK, particularly the fintech and technology sectors, even if a decision is taken not to build a digital pound.”
The report also thanked the public for their feedback on the concept of a CBDC, noting the “strength of feeling among individuals on a range of issues.” Primary among these were concerns over government interference with user spending activities, which the report countered by confirming that “The Bank and the Government would not access users’ personal data through the Bank’s core infrastructure – and legislation introduced by the Government for a digital pound would guarantee users’ privacy.”
These assurances are unlikely to satisfy skeptics who will not be convinced by the government’s promises and will wait until a prototype is ready for testing before deciding on such matters.
