Source · Select Committees · Treasury Committee
Recommendation 10
10
Accepted
Paragraph: 58
Unclear whether digital pound benefits outweigh significant privacy and financial stability risks.
Recommendation
This report has set out some of the benefits and risks from a digital pound. While there are some potential benefits, their extent is unclear and there are significant risks and challenges to be worked through, particularly in relation to privacy and financial stability. It is not clear to us at this stage whether the benefits are likely to outweigh these risks. Nevertheless, we support the Bank of England and Treasury undertaking further consultative work on the design of a digital pound to enable it to be launched if benefits increase and risks to privacy and financial stability are mitigated. This consultative work could also have wider, indirect benefits for the UK’s competitiveness by furthering the Treasury and Bank of England’s understanding of new payment technologies. It is important, however, that work on the digital pound does not distract the Bank of England from its core tasks of controlling inflation and maintaining financial stability.
Government Response Summary
The government accepts the recommendation, stating that the committee's message aligns with HM Treasury and the Bank's approach to the next design phase, which will deepen understanding and build an evidence base for a decision later this decade.
Paragraph Reference:
58
Government Response
Accepted
HM Government
Accepted
The core message of the Committee’s Report, to proceed with care while noting the value of further exploratory work in the design phase, echoes HM Treasury and the Bank’s approach to the next phase of work. No decision has yet been taken on whether to introduce a digital pound. The design phase will deepen our understanding of how to design a digital pound that maximises opportunities whilst mitigating risks and aims to develop a robust evidence base to inform a decision later this decade as to whether, or not, to proceed to launch.