The Bank of England has received approximately 50,000 responses during its consultation on the potential introduction of a digital pound. Deputy Governor Jon Cunliffe highlighted key concerns raised by the public, including privacy, programmability, and the future of physical cash.
Privacy was a significant concern, with most respondents worried about how personal data would be handled and the privacy of digital pound transactions. Cunliffe assured that the digital pound would offer the same level of privacy as electronic payments, with the Bank of England not accessing individual transaction data.
Programmability was another focus, as concerns emerged about potential limitations and terms dictated by the central bank. Cunliffe clarified that the bank had no plans to restrict the digital pound’s functionality. Instead, private sector firms would develop payment services with greater programmability, subject to user consent.
The shift from physical cash to digital currency raised concerns about the decline of cash. Cunliffe noted recent legislation ensuring the continued availability of physical cash alongside digital innovations.
Cunliffe acknowledged a wide range of opinions and debates about the digital pound’s potential. Some are concerned about rapid adoption destabilizing the financial sector, while others question the need for a digital pound. Concerns about creating a divide between physical cash and digital money were also raised.
While the digital pound is under consultation, the Bank of England is exploring stablecoins tied to traditional assets. Cunliffe hinted at potential constraints on decentralized models and emphasized the need for a discernible legal entity responsible for risk management in the payment system.
Similar limits to those proposed for the digital pound may be considered for stablecoins, focusing on distinct legal entities and brand identities to prevent consumer confusion and manage risks.
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