The DSS will last five years and could lead to a new regulatory regime for securities settlement.
UK’s Planned Stablecoin Rules Need Reworking, Crypto Advocates Say
Crypto industry groups in the U.K. say local regulators’ proposals for supervising stablecoins need reworking.
UK’s Digital Pound Approach Should Help Manage Privacy Concerns, Experts Say
The U.K.’s approach to handling privacy concerns posed by a digital pound should help quench concerns, according to interviews with a wide range of crypto industry legal and technical insiders.
Bank Of England Reconsiders: Potential Freeze On CBDC Launch Raises Concerns
On January 25, the Bank of England (BoE) and HM Treasury published a response to the Consultation Paper regarding a ‘digital pound’ issued in February of 2023. The consultation paper sought the public’s feedback on introducing a UK central bank digital currency (CDBC).
Is The UK Ready To Introduce Their CBDC?
The BoE and HM Treasury consider that introducing a CBDC could provide people with an “additional choice of safe payment that is fit for the future,” unlock development opportunities for businesses, and make day-to-day payments more “convenient” while reducing costs for those who accept them.
The consultation response highlighted that the consultation marked the beginning of the design phase of the digital pound project and, according to the BoE and HM Treasury, the developing process of a CBDC and its platform will present lasting benefits for the digital economy of the country, regardless of the decision that is ultimately taken.
The consultation collected over 50,000 responses from the public, including individuals, businesses, and academia. The feedback illustrated some general concerns the respondents had regarding the digital pound.
Due to these concerns, the response by the BoE and UK Treasury determined that “it is too early” to decide whether to introduce a digital pound, as the feedback makes clear “that legislation introduced by the Government for a digital pound would need to provide protections to guarantee users’ privacy and control of their money.”
Respondents Concern Over A Digital Pound
The feedback received from the respondents brought forward two key concerns: privacy and the possibility of cash being replaced.
The response clarified that a digital pound would not replace cash, any existing form of money, or payment like debit and credit cards. However, it would complement physical money and other payment methods “as a new form of digital money for use by households and businesses for their everyday payment needs.”
To guarantee this, the response explained that “the Government has legislated to safeguard access to cash, ensuring that it would remain available even if a digital pound were launched.”
Regarding user privacy, the response acknowledged the importance of ensuring trust in a CBDC issued by the central bank is essential. Therefore, to guarantee that privacy is a core design feature of a digital pound, the following measures were made: the BoE and HM Treasury won’t have access to users’ data.
The BoE committed to exploring technological options to prevent the bank from accessing users’ data through its core infrastructure, and the BoE and UK Treasury would not program the digital pound.
The BoE and HM Treasury assured their commitment “to maintaining an open and collaborative approach throughout this design phase” by increasing both organization’s engagement with experts from the industry, civil society, academics, and technical specialists.
Lastly, the response confirms that experiments will be undertaken with companies “to test how a digital pound could work in the real world.”
The launch of the CBDC will be decided after the design phase culminates around 2025. If the decision to build a digital pound is taken, its introduction will come only after both Houses of Parliament have passed the relevant legislation.
UK House of Commons recommends further CBDC tests on viability, risks
The U.K. Parliamentary Committee fears that an official launch will demand a significant investment, adding that “It is not clear to us at this stage whether the benefits are likely to outweigh these risks.”
UK stablecoin regulation begins to take shape in multiple FCA, BOE documents
It’s not expected to come into force until 2025, but new publications from the FCA and BOE shed light on regulators’ thinking.
UK Financial Watchdogs Publish Plans to Regulate Stablecoins
The U.K. government published plans for regulating crypto last week.
Fed, BOE officials share continuing interest in CBDCs, stablecoin regulation
Sir Jon Cunliffe looks at payment solutions of the past and future in his last speech as deputy governor of the BOE.
Incoming BOE Deputy Governor Highlights Crypto Risks, Cites Benefits at Parliamentary Hearing
There are benefits to crypto technology, and the digital pound could anchor digital money, Sarah Breeden said.
Bank of England Wants Digital Pound Advisers as It Moves to CBDC Design Phase
The Bank of England has also started recruiting for its central bank digital currency engagement forum.
Bank of England will get more power in regulating stablecoins
The United Kingdom government could rebalance the power between the Bank of England and the country’s principal financial regulator, the Financial Conduct Authority.
UK’s Central Bank Forges Ahead With Plans for a Systemic Stablecoin Regime
The U.K. recently passed the Financial Services and Markets Act 2023 into law which gave the BoE powers to set up a systemic stablecoin regime.
Sarah Breeden, CBDC Working Group Member, Appointed Bank of England Deputy Governor
The U.K. closed a consultation on a digital pound in June, something the bank thinks is likely needed.
BOE governor trashes crypto, stablecoins in favor of ‘enhanced digital money’
A retail CBDC or “enhanced” digital money would support the singleness of money and settlement finality, Andrew Bailey said, but crypto isn’t money.
Payments Platform Nuggets Working With Bank of England on Privacy Layer for Digital Pound
The BofE said in February that a digital pound was likely needed, but that it will not make a decision on issuing one until at least 2025.
Digital pound will be pseudonymous with a focus on privacy: BoE CBDC chief
The underpinning technology for the U.K.’s CBDC could use an alternative to blockchain technology.
Central Banks Successfully Test Over 30 CBDC Use Cases, Including Offline Payments
An API layer could facilitate a wide range of central bank digital currency payment scenarios, a Bank for International Settlements and Bank of England experiment has shown.
7 central banks and BIS continue examination of ongoing policy issues for retail CBDC
The Bank for International Settlements has published the fifth paper by the group, highlighting its latest thinking on a potential retail CBDC.
BoE fintech head says crypto doesn’t ‘fulfill any of the functions of money’
At a recent event, Tom Mutton, the Bank of England’s head of fintech, touted the privacy benefits of CBDCs while denouncing the anonymity of cryptocurrencies.
BIS, Bank of England conclude DLT settlements pilot
The insights of Project Meridian would be used by the Bank of England in its real-time gross settlement system.
