The British parliamentary committee, based in the House of Commons, has asked the Bank of England and the Treasury to undertake further advisory work to determine the potential benefits of launching a digital pound.
Provide more transparency about costs
according to a report According to the House of Commons Treasury Committee, the initial work and testing phases on introducing a central bank digital currency (CBDC) involve significant costs for both the Bank of England and the Treasury. The report recommends providing more transparency around the costs of central banks’ digital currency initiatives from 2024 by including a separate line item in the annual report and accounts:
It is vital that the Bank of England and the Treasury monitor these costs closely to avoid spending too much on a digital pound that may not be developed further.
Ongoing testing of the English-language CBDC has revealed many benefits in terms of issuance, distribution and privacy. However, the committee fears that a formal launch will require significant investment, adding: “It is not clear at this time whether the expected benefits outweigh these risks.”
Do not speculate on the assets of the digital pound
The committee urges the UK central bank not to speculate on the ability of “the digital pound to solve problems it may not be able to solve” and to ensure that the digital pound does not add to the already existing problem of financial exclusion caused by the paper economy.
While the Bank of England and the UK Treasury recognize the need for a digital pound in the future, additional preparatory work is still needed to build the necessary infrastructure. Factors such as the decline in the use of fiat money, the emergence of new forms of privately issued digital money, and international developments in the field of central bank digital currencies may influence the decision to proceed with the launch of a digital currency beyond the LB design stage.
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