The British Daily Telegraph reported that the Bank of England and the Treasury will strongly support the “digital pound” next week, setting out a roadmap for the introduction of a new central bank currency by 2030.
“Based on our work to date, the Bank of England and HM Treasury judge that the digital pound may be needed in the future,” the Governor of the Bank of England (BoE) and current Chancellor of the Exchequer reportedly said in an excerpt from a consultation paper.
“It is too early to commit to building the infrastructure for it, but we believe further preparatory work is justified.”
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The digital pound would use the blockchain technology currently used by cryptocurrencies to record transfers on a central digital ledger, which would theoretically allow banks to issue new money directly to individuals or businesses digitally. The digital pound would also allow people to hold digital currency on devices such as smartphones without the need for a bank account, similar to the way physical cash is kept in wallets.
The Bank of England and the Treasury will launch a four-month consultation, at which time businesses, academics and the wider public will be invited to give their views on the launch of the digital pound.
In addition, the Bank of England and the Treasury will begin the “design” phase of the project to develop a blueprint for how to build and use the digital pound. The creation of the digital pound is expected to take several years, and sources said it will involve “significant public investment.
The report also said the Bank of England has set 2025 as the “earliest” date the bank can start building and testing prototypes of the currency. The bank has previously said that the earliest date for the launch of the digital pound is 2026-2030.
Other countries are already experimenting with national digital currencies and China is one of the early pioneers, with the digital yuan starting to be tested in 2021.
