The Bank of England (BoE) and the Treasury believe that the UK should create a central bank digital currency (CBDC) by 2030, according to a February 4 Telegraph report.
A “digital pound” road map is set to be introduced next week, government sources told the newspaper. Deputy Governor Jon Cunliffe is scheduled to provide an update on the BoE’s work at the CDBC on February 7.
“Based on our work to date, the Bank of England and HM Treasury have judged that it is likely that a digital pound will be needed in the future,” Governor Andrew Bailey and finance minister Jeremy Hunt told the Telegraph.
The BoE declined to comment on the article, but announced that a joint consultation on the digital pound would be released soon.
The UK is set to see a 35% drop in cash and coin payments by 2020. Cash accounts for about one in six payments; debit and credit card accounts for the other five. Central bank digital currency is a digital version of fiat currency, tied to fiat reserves at a ratio of 1:1, allowing citizens and businesses to manage their funds more efficiently and affordably.
Related: What are CBDCs? A beginner’s guide to central bank digital currencies
The news comes just days after the UK’s economy and finance ministry posted on LinkedIn an open position for the central bank’s head of digital currency. The job description lists the role as “significant, complex and cross-cutting”, requiring “extensive involvement and beyond HM Treasury.”
The digital pound is one of the CBDCs expected to be launched worldwide in the coming years. The European Central Bank (ECB) has discussed the future of the digital euro, and several countries, including Sweden and Denmark, have also begun to explore the concept of digital currencies.
Pioneering CBDC, China’s digital yuan was launched in beta last year for local iOS and Android app stores. The new development includes upgrading the smart contract functionality along with several use cases, Cointelegraph reported.