BoE reconsiders digital pound as privately developed payments technology develops
Governor raises the issue of the necessity of new money in case innovations are successful

A report revealed that the Bank of England (BoE) is considering scrapping its long-awaited central bank digital currency (CBDC) project called the digital pound. The reconsideration is being prompted by fears of the advantages of a consumer-centric CBDC and the emergence of privately owned payment technology, according to individuals familiar with the matter, as explained by Bloomberg.

Governor Andrew Bailey has raised the question as to why a new type of money should be invented in the case that the current trends of innovations in commercial banks are successful. During a recent parliamentary hearing, he stressed, “When that becomes a success, I question why we have to introduce a new form of money”. BoE is privately pressuring banks to develop faster ways of payment systems in the private sector as an alternative to introducing a digital pound.

Mounting Skepticism and Global CBDC Retrenchment

The change is an indication of a backtracking by the BoE on its previous position that a digital pound was most likely necessary. The bank and HM Treasury had been convinced since their research that a CBDC would be needed, but doubts have since arisen until 2023. The UK is not as far in CBDC development as other countries, and even though a firm decision to adopt the digital pound has not been made, the country is not in a good position to take a step forward.

The project has generated many controversies, and it has been criticized on grounds of privacy, risk of destabilizing runs on banks in case of crisis, and the possibility of undermining the British pound with foreign exchange. The consultations with the population also demonstrated a lot of distrust, as more than 50,000 responses mostly criticized the project.

Meanwhile, the global landscape shows mixed progress. Even though a limited number of countries such as the Bahamas, Jamaica, and Nigeria have already introduced CBDCs, some are in a pilot, development, or research stage. The growth of CBDC has been going on; however, the interest seems to be moderated by caution and controversy regarding practical returns and threats.

Private Innovation vs Public Authority in Payments

The stance of the BoE is influenced by the desire to adhere to innovation in the private sector rather than to centralized issuance of digital money. With the entry of efficient electronic payment technologies by the private companies, the Bank does not feel the need to develop its own digital currency that much.

Especially during times of financial stress, researchers worry that CBDCs can threaten the viability of traditional banks by luring deposits away from commercial banks and toward the central bank. The cautious posture of the BoE is reinforced by these concerns.

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An increasing tendency of widespread suspicion towards CBDCs is reflected in recent legislative attempts in the United States, such as the Anti-CBDC Surveillance State Act and other recent legislative proposals: they actively restrict CBDC testing.

The post Digital Pound in Doubt: What’s Causing the Bank of England’s Sudden Shift? appeared first on Live Bitcoin News.

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Filed under: Bitcoin - @ July 23, 2025 6:15 pm