UK Government Pursues Digital Pound While Bank CEOs Restrict Bitcoin Access
The UK continues to show its desire for a digital pound, just as its companies try to limit access to Bitcoin.
The Bank of England and the UK Treasury have released a consultation paper outlining their case for a retail central bank digital currency (CBDC) or “digital pound.” The paper has been reviewed by the Bank-Treasury CBDC Taskforce, which was established in April 2021. Although the bank is still considering whether to introduce the digital pound, it believes that the preparatory work is justified. If introduced, the digital pound would be a form of sterling that would be used by households and businesses for their daily payments. The Bank of England and the UK Treasury will engage with stakeholders across the country to seek their views on the proposed model, according to the announcement.
Simultaneously, a roadmap unveiled by Governor Andrew Bailey and Chancellor Jeremy Hunt detailed their aim to prevent a run on banks. According to a Telegraph report, the two officials have said that consumers will be prevented from hoarding the new digital pounds issued by the Bank of England. To prevent large and rapid outflows from traditional banks, Britons will be limited to transferring a few thousand digital pounds into their accounts. The frictionless nature of digital money is seemingly seen as a potential risk to the stability of the traditional banking system. The previously mentioned consultation paper indicated that this limit could potentially be £10,000.
Just as these developments are taking place, bank CEOs in the UK are blocking customers’ access to cryptocurrencies due to concerns over fraud and volatility, according to reports. Executives appeared before the Treasury Select Committee to discuss the issue. Alison Rose, CEO of NatWest Group, told the committee that the bank had taken a “pretty hard line” on cryptocurrency due to the stability and volatility of the platforms and the risk of fraud. Social media and technology platforms were cited as the primary source of fraud, but the executives also expressed their support for the new regulations proposed by the UK Treasury.
All of these events indicate the capacity for the government of the United Kingdom, with the help of major companies, to lock their citizens into financial obedience with strict regulation regarding the usage of each private citizens’ money. The UK continues to make further strides towards the confinement and restriction of the bitcoin and cryptocurrency industry, while pursuing a CBDC system that would realize the worst projections of that technology.