UK Treasury Considers Digital Pound, Maintains Crypto Hub Objective – Economic Secretary to the Treasury Andrew Griffith told lawmakers, as reported by the BBC, that the executive power in London is considering the introduction of a digital version of the national currency. In the coming weeks, a public consultation on the characteristics of a digital pound will be undertaken, he told the Treasury Select Committee.
Quoted by Reuters, he also emphasized: “The consultation is going to say this is an if and not a when. We are not fully into the inevitability of doing this.” A digital pound raises many public policy issues and the government has to “get them right,” Griffith stated. He addressed fears that a state-backed coin could undermine privacy, emphasizing that its design would not permit the government to follow individual transactions beyond measures aimed at combating criminal activity such as money laundering.
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Griffith further elaborated that the first use case for a central bank digital currency (CBDC) issued by the Bank of England would likely be in wholesale settlements but admitted that a privately issued, fiat-backed stablecoin “would probably get there first.” “I want to see us establish a regime, and this is within the FSMB, for the wholesale use for payment purposes of stablecoins,” the minister added, referring to the Financial Services and Markets Bill, which is currently being debated in the British Parliament.
Andrew Griffith also disclosed that a new consultation on the U.K.’s regulatory approach to crypto assets in general will be undertaken. While the EU has already agreed on a complete set of rules for the market that are due to take effect in 2024, the minister noted that the U.K.’s legislation may be much more expansive and encompass decentralized finance.
“We want the right regime, operated in the right way, that has the right balances in it,” he told the members of the committee while vowing to hold multiple roundtables with industry participants as part of the discussions. Andrew Griffith’s statements come after last year’s slump in the valuations of major cryptocurrencies like bitcoin and the following the collapse of large market players such as crypto exchange FTX. Amid an ongoing crypto winter, consumer protection in the space has come under scrutiny, the reports noted.
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