A U.K. parliamentary committee fears an official launch would demand significant investment and that the benefits may not outweigh the risks.
A United Kingdom parliamentary committee in the House of Commons has asked the Bank of England and Treasury to conduct further consultative work to determine the benefits of launching a digital pound.
The groundwork and tests related to the launch of a central bank digital currency (CBDC) incurred significant costs for the Bank of England and Treasury, according to a House of Commons Treasury Committee report. It recommended greater transparency around the expenses incurred around CBDC initiatives by having a separate line item in its annual report and accounts from 2024 onwards:
“It is important that the Bank of England and Treasury keep control of these costs to avoid spending more than necessary on a digital pound that might not proceed to being built.”
The ongoing tests of a British CBDC highlighted numerous benefits concerning issuance, distribution and privacy, among others.
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The committee asked England’s central bank to avoid speculating that “a digital pound can fix problems it can’t” and to ensure that a digital pound does not worsen the financial exclusion precedent set by the fiat economy.
While the Bank of England and HM Treasury see the need for a digital pound in the future, committing to build the infrastructure for one requires further preparatory work.
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