Digital pound could hit financial stability

Prospect of widely-used cryptocurrencies issued by Big Tech has galvanised efforts

LONDON:

A digital pound used by consumers could harm financial stability, raise the cost of credit and erode privacy, though a version for wholesale use in the financial sector demands greater appraisal, British lawmakers said on Thursday.

Britain’s central bank and finance ministry said in November they would hold a consultation this year on whether to move forward on a central bank digital currency (CBDC) that would be introduced after 2025 at the earliest. Central banks across the world have stepped up work on CBDCs to avoid the private sector dominating digital payments as cash use falls. The prospect of widely-used cryptocurrencies issued by Big Tech has also galvanised such efforts.

Published in The Express Tribune, January 14^th, 2022.

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