With the rise of Central Bank digital currency (CBDC) emerging and proving a prominent use case, several central banks around the globe have been pressured to work and try to develop central bank digital currency (CBDC). On Tuesday, Deputy Governor of the Bank of England Jon Cunliffe said that the UK is competing in the CBDC race.
This update comes a few months after the region announced the newly elected prime minister, Rishi Sunak, a so-called believer and supporter of the crypto industry. So far, Sunak has shown more interest in stablecoins that have also played a big role in Britain’s push for a digital pound.
Britain Competes In CBDC Race
In Tuesday’s financial stability report at the Bank of England, Deputy Governor for this financial institution Jon Cunliffe was asked some questions about the upcoming launch of Britain’s digital pound. When MPs on the Finance Select Committee asked about the pending public consultation of the digital pound, Cunliffe assured the organization that the UK was not far behind and was working on its own CBDC.
Cunliffe said, “I don’t think we’re behind other advanced economies.” In particular, the race for CBDCs has heated up since the private sector has been quick to launch and successfully capture public attention and adoption with stablecoins.
According to a leading financial industry official, Britain’s digital pound will help the country improve and implement the latest payment advances and help London become a “competitive” global financial centre. Cunliffe notes, “This can be of great benefit to the economy and society.”
Digital Pound Consultation Delayed Due to “Disruption”
Vering returns to Britain’s digital pound CBDC Public consultation is expected to release late autumn, the lawmakers asked the deputy governor if the disagreement could be behind the delay. Cunliffe replied that there was no dispute between the Bank and the finance ministry, but that the consultation had been delayed due to disruption.
After the government’s mishandling of the budget, which led to a fall in the price of British government bonds, the Bank intervened in the market in September, disrupting the consultation plan.
When asked if plans for a digital pound would go ahead, Cunliffe replied, “More likely than not.” Furthermore, the MP asked the deputy governor about the race to launch the CBDC. Cunliffe said:
This is not about the specific things that need to be done, but about opening new borders for people to increase payments.
According to Cunliffe, there is a need to closely observe how technological and economic trends develop in the next few years before considering whether the digital pound will be “technically feasible.”
Cunliffe added that the issue is to reassure many with confidence in the organized digital currency so that they will not “confuse the digital pound with the Wild West cryptocurrency ecosystem out there,” according to Reuters.
Speaking of cryptocurrencies, the global market cap has changed significantly since the beginning of the year. It stands at $1.1 trillion, up nearly 10% of the $850 billion seen at the end of last year. Crypto assets such as Bitcoin and Ethereum have increased by more than 40% since the beginning of 2023.
Option image from UnSplah, Chart from TradingView.