In for a penny - in for a digital pound?

On 7 February 2023, the joint Bank of England-HM Treasury CBDC Taskforce published a consultation paper on a potential retail UK central bank digital currency (CBDC). This 'digital pound' would be a new form of sterling, similar to a digital banknote, issued by the Bank of England for everyday use by households and businesses. Charlotte Hill and Mila Pencheva consider the case for a CBDC, the proposed model and key milestones.

Charlotte Hillis a partner and head of the Financial Services Regulatory group at Taylor Wessing in London, whereMila Penchevais a senior associate. Contact them onc.hill@taylorwessing.com andm.pencheva@taylorwessing.com.

At the outset, the Taskforce [1] makes it clear that while it is likely a digital pound will be needed in the future, it is too early to commit to building the infrastructure, being a major piece of national infrastructure likely to require several years to complete. The digital pound will require the backing of deep public trust as to safety, accessibility and privacy, built through an open national conversation about the future of money alongside detailed technical consideration by experts. This consultation [2] is aimed at starting this conversation and beginning to build that foundation of public trust.