As the technology industry continues to boom across sectors, the Great British pound is yet again becoming the latest victim to new technology.
Is the digital pound just hype or is it becoming a reality?
The digital pound would be a new type of money, categorised as CBDC (Central Bank Digital Currency) issued by the Bank of England.
The Bank of England has stated you will be able to use it in-store and online to make payments.
The BoE’s Governor Andrew Bailey expressed “As the world around us and the way we pay for things becomes more digitalised, the case for a digital pound in the future continues to grow.”
The demand for cash has been steadily decreasing over the years, physical money accounted for 60% of transactions as recently as 2008, but now makes up only 15% – Financial Times.
It’s been clarified that the introduction of digital money would not replace cash. It would also neither be classified as cryptocurrency or a cryptoasset and £10 in digital pounds would still equate to a £10 banknote.
You will still be able to continue to tap to pay for goods, just like you do with a bank card or your smartphone. And if it becomes official, websites will have a digital pound option when checking out.
There isn’t a conclusive decision whether the digital pound will go ahead but it’s something the bank of England are heavily debating. If approved, the system would not be built until at least 2025.
“We want to investigate what is possible first, whilst always making sure we protect financial stability,” Chancellor Jeremy Hunt.
You can submit your views and feedback to this idea until 7th June 2023 on the bank of England website here.
Read our previous blog post ‘What is the Digital Services Act‘ here