UK Finance Minister Rishi Sunak assured that he will create a working group with experts from the Treasury Department ( HM Treasury ) and the Bank of England, to assess risks, uses and design characteristics of a central bank digital currency (CBDC).
The HM Treasury explained that the purpose is to ensure a “strategic approach and promoting coordination between the authorities of the United Kingdom as they explore the CBDC, according to its statutory objectives”, highlights a statement released on April 19 .
The group of experts that will evaluate the proposal will focus on four points. The first will be to coordinate the exploration of the objectives, use cases, opportunities and risks of a potential UK digital currency. Second, guide the evaluation of the design characteristics that a CBDC should display.
The third point has to do with supporting a rigorous, coherent and complete evaluation of the case and lastly, studying other cases of digital currencies in the world, in order to ensure that the United Kingdom remains at the forefront of global innovation.
For the English authorities, digital currency is a new form of money that must coexist with cash and bank deposits, therefore it will not be a replacement.
In this sense, the United Kingdom maintains the same approach as the majority of countries that have this type of project , including China . The idea is to issue a retail CBDC, which would operate the same as cash.
The Governor of the Bank of England, Andrew Bailey does not believe that there is a cryptocurrency model or design that can last over time. Source: bankofengland.co.uk
“The Government recognizes that cash is still important to millions of people across the UK, and has committed to legislation to protect access to it,” the text highlights.
They also reported the creation of two new forums to engage technical experts and key sectors of the economy such as financial institutions, merchants, businesses and consumers in the discussion on creating a digital currency.
In this way, the United Kingdom joins initiatives such as the Sand Dollar (or sand dollar) of the Bahamas, the digital yuan or e-yuan of China, Canada, Sweden and 60 other countries that are evaluating similar projects .
UK also reviews stablecoins
Just as the proposal for a digital currency issued by a central bank has entered into evaluation, the British government does the same with cryptocurrencies anchored or stablecoins in its territory.
At the beginning of 2021, HM Treasury opened a consultation for cryptocurrency companies, trade associations, representative bodies, academics, legal firms and consumer groups, to give their opinion on the matter.
The intention, according to a document issued by the Government and reported by CriptoNoticias, is to create a regulatory framework in the United Kingdom that takes advantage of “the benefits of new technologies, supporting innovation and competition, while mitigating risks for consumers. and financial stability ”.
However, Bank of England executives have so far been against bitcoin and cryptocurrencies. According to the governor of the financial institution, Andrew Bailey, there is currently no cryptocurrency model or design that can last over time .
“I don’t think cryptocurrencies, as originally formulated, are [durable] […] People need to make payments with a currency that maintains a stable value,” he said.