LONDON (Reuters) -No decision will be made for at least a couple of years on whether Britain will go ahead with a central bank digital currency for the general public, the Bank of England said on Tuesday, pushing back the timeline for the project.
Former Prime Minister Rishi Sunak championed the idea of a digital currency in 2021 when he was finance minister, but the BoE and the current government have been more reluctant and a public consultation attracted widespread privacy concerns.
Governor Andrew Bailey said in October that a central bank digital currency was “not my preferred option” but might be needed if British banks did not ensure their payment systems were more attractive than those offered by less regulated tech companies.
The BoE said on Tuesday it was starting work with Britain’s finance ministry on a potential design for a digital currency, in line with plans in a previous consultation.
“After completing the design phase over the next couple of years, including taking account of developments in the wider payments landscape, the Bank and government will assess the policy case for a digital pound and determine whether or not to proceed,” the BoE said.
In January 2024, the BoE said a decision on whether to go ahead with a digital currency would not be made before 2025 at the earliest.
Britain’s government has said a digital pound would be private but not anonymous, unlike physical cash.
As with existing bank accounts and credit card payments, authorities would be able to track transactions they suspect involve money laundering or finance terrorism.
“This legislation would safeguard users’ privacy, guaranteeing that neither the Bank nor the government could access users’ personal information nor control how households and businesses use their money,” the BoE said.
(Reporting by Suban Abdulla; additional reporting by Sachin Ravikumar and Sarah Young; editing by David Milliken and Christina Fincher)
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