According to Cointelegraph: The House of Commons, part of the UK's Parliamentary Committee, has requested that the Bank of England and the Treasury conduct further investigations into the potential merits of launching a digital pound. There are concerns around the significant costs associated with creating a central bank digital currency (CBDC), as detailed in a recent report by the House of Commons Treasury Committee.
As part of these concerns, the committee has recommended improved transparency surrounding CBDC-related costs. The committee suggested compartmentalization of these costs into a separate line item in the annual report and accounts starting from 2024, stating:
“It is important that the Bank of England and Treasury keep control of these costs to avoid spending more than necessary on a digital pound that might not proceed to being built.”
Early tests into the feasibility of an English CBDC demonstrated potential advantages, including those related to issuance, circulation, and privacy. However, the committee fears that the benefits may not exceed the risks associated with such a vast financial obligation.
Furthermore, it has reminded England’s central bank to deter from over-speculating the potential solutions offered by a digital pound, and emphasized the need to ensure it doesn’t exacerbate financial exclusion trends observed in the fiat economy.
The Bank of England and HM Treasury acknowledge future requirements for a digital pound, but further preparation and due diligence are necessary before proceeding. Considerations for the launch of a digital pound following the design phase will be influenced by factors such as the dwindling usage of physical currency, the emergence of new forms of privately issued digital money, and global developments in CBDC.