The new role, “Head of CBDC,” will help the United Kingdom “explore the case for a digital pound,” although the U.K. doesn’t agree.
The U.K. government’s Ministry of Economic Affairs and Her Majesty’s Treasury is appointing the head of Central Bank Digital Currency (CBDC) to lead the development of the digital pound The task is described as “significant, complex and cross-cutting” and “will require extensive engagement across and beyond HM Treasury”.
According to the LinkedIn post, the Treasury and the Bank of England, through the CBDC Task Force, are investigating the digital pound case together The role of the head of the CBDC is to move the United Kingdom government closer to its goal of rolling out the CBDC.
HM Treasury’s CBDC head posting. Source: LinkedIn
Danny Scott, CEO of U.K.-based Bitcoin
company CoinCorner, told Cointelegraph that a CBDC could be missing “actual, real-world uses and purposes, which we often see”.
“For those who have been in the industry for a cycle or two, we have seen hypes come and go — altcoins, blockchain, distributed ledger, ICOs, DeFi, NFTs you see big companies come in and jump on the latest hype to not look like they are falling behind. For most, it falls under R&D and exploratory, which is perfectly understandable.”
Scott, who has been working and building in the bitcoin space for over a decade, explained that sometimes, the public can misinterpret R&D projects in the crypto space and possibly confuse them with useful real-world solutions.
“The CBDC [digital pound] is not falling away from us. Many countries around the world are exploring this and trying to figure out the advantages it has over the current system — fair enough, it will.”
Indeed, the move to the digital pound coincides with a trend among central banks worldwide to explore the potential of CBDC. In Europe, the European Central Bank (ECB) is actively studying the future of the digital euro, and several countries, including Sweden and Denmark, are exploring their own digital currencies
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CBDCs claim to deliver many benefits, such as improving financial inclusion, reducing costs for businesses and consumers, and increasing security and efficiency in the payment system
But El Salvador banked 70% of its unbanked population with the introduction of bitcoin as legal tender, while countries like Nigeria, Ghana and Kenya can now access money from all over the world on a mobile phone or bitcoin exchange account
Paying for coffee using Bitcoin in El Salvador. Source: Cointelegraph
Furthermore, there are potential risks to introducing a new digital currency. The U.K. James Dewar, partner at Bitcoin merchant solution Bridge2Bitcoin and director of Laser Eyes Cards, told Cointelegraph that “introducing CBDC will present different challenges and risks than Bitcoin itself,” as CBDC requires “trust in third parties, central banks” and governments, the currency not to abuse the supply”.
“This risk applies at a macro level as it is today, but more concerning is with the CBDC on the ability of a government or its agencies to monitor and censor individual spending. This is a huge risk to freedom and the right to own property in our societies.”
He raises the question, “Whether we believe in one government or another, do we as citizens believe in all future governments, of whatever color, with this power?” Tony Yates, a former senior adviser to the Bank of England, speaks out against the CBDC. Echoing Dewar’s views, he questioned the motives behind the global spread of CBDCs, calling them “suspicious”.
Dewar continued, “It is reasonable that the government should thoroughly investigate the idea. Overall, we think political pressure may have been brought into the process that ignores or significantly reduces the risks to society of the CBDC.”
The “digital” aspect of money is also brought into question. The U.K. is increasingly a digital cash-based society: According to the Bank of England, less than 15% of payments are made in physical cash, and as many as 23 million people — nearly a third of the U.K. population — have not used cash In 2021, after all.
Cointelegraph reporter Joe Hall races contactless payments, bitcoin vs pound sterling in Gibraltar. Source: Cointelegraph
“Don’t we already have a digital pound?” Scott asks the Treasury.
“From an end-customer perspective, pounds are increasingly digital these days regardless of the mechanism used. So, once their exploration phase is over, I would love to see a list of benefits and new features that CBDC will bring to the public.”
In the meantime, Scott is “a global, interactive pledge with a focus on bitcoin