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Jeremy Hunt: The digital pound will not replace cash

The UK Treasury Secretary said that the authorities do not yet know all the possibilities of central bank digital currencies, but they will strive to protect the stability of the financial system with the help of such tools.

The Bank of England (BoE) and the United Kingdom Treasury are developing a plan to create a digital currency that will provide a new payment method and in doing so eliminate the mandatory replacement of cash. A joint consultation paper on central bank digital currencies (CBDCs) is reportedly due to be published on Tuesday, February 7.

The Treasury and the BoE will seek feedback on how best to approach the creation and regulation of the digital pound. Treasury Secretary Jeremy Hunt said the two organizations will strive to develop a modernized digital payment system that does not exclude the use of cash.

“Cash is here to stay – the digital pound issued and backed by the Bank of England could be the new secure, affordable and easy-to-use payment method. However, we have yet to find out what the digital currency is capable of while trying to maintain financial stability,” says Hunt.

The UK intends to support private technology companies that will take on the development of an alternative to stablecoins. Bank of England officials expect a replacement to be developed in the coming years.

Earlier, the Deputy Governor of the Bank of England, Jon Cunliffe, said that the crypto industry is integrating very quickly into traditional finance, and therefore must be carefully regulated to protect retail investors and the financial system as a whole.

Source: Bits

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