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Central Bank Digital Currencies

Question for Treasury

UIN 41103, tabled on 18 August 2021

To ask the Chancellor of the Exchequer, what assessment he has made of the environmental impact of the proposal for a central bank digital currency.

Answered on

6 September 2021

The UK, like many countries globally, is actively exploring the potential role of central bank digital currencies, which would be an electronic form of central bank money that could be used by households and businesses to make payments. The Bank of England published a discussion paper in March 2020, which considered the possibility of a retail central bank digital currency.

At Fintech Week 2021, the Chancellor announced a new Taskforce led by HM Treasury and the Bank of England to lead the UK’s exploration of a central bank digital currency, with separate forums to engage civil society and technology experts throughout. The Government and the Bank of England have not yet made a decision on whether to introduce a central bank digital currency in the UK and will engage widely with stakeholders on the benefits, risks and practicalities of doing so, including in relation to energy usage.

The UK, as part of its G7 presidency, has also underscored the need for any potential CBDC to be resilient and energy efficient, alongside other objectives.

Answered by

Treasury