To ask His Majesty's Government what recent discussions they have had with the Bank of England regarding the development of a "digital pound"; and what assessment they have made of the impact of a digital pound on the financial system in the UK.
Answered on
20 February 2023
HM Treasury and the Bank of England have engaged extensively through the Central Bank Digital Currency (CBDC) Taskforce on the subject of a potential digital pound.
HM Treasury and the Bank of England this February issued a joint consultation on a potential digital pound in the UK. This is the latest milestone in our work on a digital pound. It marks the end of the research and exploration phase, and the beginning of a design phase of work.
HM Treasury and the Bank of England have announced that a UK central bank digital currency, the digital pound, is likely to be needed in the future. It is too early to commit to build the infrastructure for one, but we are convinced that further preparatory work is justified.
The digital pound would be a new form of sterling, similar to a digital banknote, issued by the Bank of England. It would be available to be used by households and businesses for their everyday payments needs – used in-store, online and to make payments to family and friends.
The consultation considers the potential implications for the financial system, and for monetary and financial stability.