However, BoE Governor Andrew Bailey stressed in comments monitored by Worthy News on Monday that his financial institution is “reluctantly” preparing to create a form of digital money accessible to the general public.
Bailey added that the move is necessary as commercial banks “risk failing” to keep up with less-regulated tech firms.
The BoE and Britain’s finance ministry said they will not decide before 2025 at the earliest whether to introduce the state-backed digital pound, also known as CBDC, to the public amid broad privacy concerns. “That (CBDC) is not my preferred option, but it’s one we can’t rule out,” Bailey recently told the Group of Thirty in Washington, a forum for central banks and commercial bankers.
Bailey does not want day-to-day payments or banking-type services to shift to cryptocurrencies or services from tech companies that he claims are “less safe or private” than banks.
Britain’s lives leftist Labour-led government says a digital pound would “be private but not anonymous,” unlike physical cash.
As with existing bank accounts and credit card payments, authorities would be able to track transactions if they “suspect” they may be involved in money laundering or finance terrorism.
The government said that if the project goes ahead, legislation would be put in place to ensure privacy following further consultation, adding that it also planned further public consultations.
Yet in a report “Enhancing the Privacy of a Digital Pound” obtained by Worthy News, even authors of the BoE, the Digital Currency Initiative, and MIT Media Media Lab expressed privacy concerns. “Despite the potential benefits to consumers and the need to reduce risks of fraud and other financial crime, that information might also be misused unless there are sufficient safeguards to protect user privacy,” the report said. “When details about consumers’ purchases and payments are available, the data may give insight into their lives, choices, preferences, and health.”
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