1
Conclusion
First Report - The digital pound: still…
Acknowledged
There are some potential benefits to the UK economy from a digital pound. A digital pound could help support innovation in domestic payments, while guarding against some of the risks posed by new forms of private digital money by maintaining public access to a form of central bank money. Innovation …
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There are some potential benefits to the UK economy from a digital pound. A digital pound could help support innovation in domestic payments, while guarding against some of the risks posed by new forms of private digital money by maintaining public access to a form of central bank money. Innovation brought about by a digital pound could also support the UK’s international competitiveness in payments (and related) technologies, particularly if it is amongst the first major central banks to issue a retail CBDC. The extent of these benefits is unclear, however. Nor is it yet clear that a digital pound is the only (or best) means of achieving them. (Paragraph 29) Risks and challenges from a digital
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Government response AI summary
The government acknowledges the committee's observation on potential benefits, reiterating that the design process itself will foster knowledge-sharing and collaboration, which are valuable regardless of the final decision to introduce a digital pound.
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HM Treasury
6
Conclusion
First Report - The digital pound: still…
Acknowledged
We are also concerned about potential misuse of consumers’ data by the user-facing firms that would manage consumers’ digital pound wallets, particularly given that the commercial use of this data could form a key part of the business model for wallet providers, in a way that it doesn’t for banks.
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We are also concerned about potential misuse of consumers’ data by the user-facing firms that would manage consumers’ digital pound wallets, particularly given that the commercial use of this data could form a key part of the business model for wallet providers, in a way that it doesn’t for banks.
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Government response AI summary
The government acknowledges concerns about private sector data misuse and states firms would comply with existing UK data protection laws, promising to explore privacy-enhancing designs and set out the regulatory framework in detail during the design phase.
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HM Treasury
7
Recommendation
First Report - The digital pound: still…
Acknowledged
While some consumers may be content to share their personal data with payment interface providers in exchange for digital pound wallet services, there is a risk that consumers do not fully understand how their data could be used, or the implications of doing so. It is vital that it is …
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While some consumers may be content to share their personal data with payment interface providers in exchange for digital pound wallet services, there is a risk that consumers do not fully understand how their data could be used, or the implications of doing so. It is vital that it is transparent to users how their data would be collected and used. There must also be clear, usable opt-outs for those that do not wish their data to be collected and used for commercial purposes. To ensure the appropriate 18 The digital pound: still a solution in search of a problem? safeguards are in place, it is vital that wallet providers are robustly regulated from both a prudential and conduct perspective, with strong penalties for those that misuse customers’ data.
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Government response AI summary
The government acknowledges concerns about private sector data use, stating all firms would comply with existing UK data protection laws, and commits to exploring privacy-enhancing designs and detailing the regulatory framework during the design phase.
Read full response →
HM Treasury