The U.K. Parliamentary Treasury Committee has issued a stern warning about the potential risks of developing a retail central bank digital currency (CBDC), or ‘digital pound’. Lawmakers are urging the Bank of England and H.M. Treasury to carefully consider data privacy and financial stability concerns before moving forward with the implementation of this new form of currency. The proposed retail digital pound is intended to be a digital equivalent of fiat money that would be accessible to individuals and businesses for payment purposes. However, there are concerns about the impact a retail CBDC could have on financial stability, including the risk of bank runs and potential increases in interest rates on bank loans. To address these concerns, the Committee suggests implementing a smaller holding limit on retail digital pounds per individual and ensuring stringent regulations and legislated protections for data access. The Committee also emphasizes the importance of maintaining transparency regarding the costs of developing and introducing a CBDC. While the Committee supports the Bank of England’s efforts to design a potential retail CBDC, it stresses that the project should not detract from the institution’s primary objectives of controlling inflation and maintaining financial stability. Ultimately, the introduction of a retail digital pound should not be seen as inevitable, and a detailed cost-benefit analysis must support its development.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | Treasury Committee, Bank of England, H.M. Treasury |
| Currencies | None |
| Securities | None |
