A digital pound could present a new frontier for payments in the United Kingdom, but the country needs more expertise in this field to launch the central bank digital currency (CBDC), the Bank of England (BoE) has claimed.
Speaking recently to legislators on the Treasury Select Committee, the BoE deputy governor Jon Cunliffe dismissed claims that the U.K. is lagging behind its peers in the CBDC field.
While he declined to confirm that the BoE would launch a digital pound, he told the committee that “it’s more likely than not.”
The BoE has been exploring the feasibility of a digital pound for years now, working with HM Treasury and other international organizations on the project. Just recently, Treasury posted a new job listing for “Head of Central Bank Digital Currency” who will set strategic direction for the digital pound efforts.
Cunliffe says the CBDC could change the payments system in Europe’s second-largest economy, comparing a digital pound’s anticipated impact to that of Apple’s App Store on mobile applications.
“This could have huge benefits for the economy and society,” Cunliffe said. “This is not about here is a particular thing that needs to be done, but about opening a new frontier for people to improve payments.”
One of the areas that the U.K. will target with the digital pound is micropayments, Cunliffe told the lawmakers.
“This would be much, much easier for you to make very, very small payments. So if you wanted to read an article in a newspaper, you wouldn’t have to subscribe to the newspaper, you could pay tiny fractions to do that,” he added.
A digital pound could indeed offer its users micropayments. However, Bitcoin has been offering real-time micropayments for years now, and its fees have remained steady at a fraction of a cent. Bitcoin micropayments have provided the foundation for developers to build cutting-edge applications that go beyond the mere exchange of value.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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