UK Parliament Begins Inquiry Into the Digital Pound

The British parliament has commenced an inquiry into matters relating to the adoption of a digital pound in the country
The British parliament has commenced an inquiry into matters relating to the adoption of a digital pound in the country

The British parliament has commenced an inquiry into matters around the adoption of a digital pound. The house called on the public to submit evidence to support the adoption of such an innovation in the country.

Calls for a CBDC have increased globally with many countries in different stages of research, implementation, and testing. In April, the Bank of England and Treasury launched a task force to explore the potential of its own CBDC – the digital pound. Also, earlier in September, NatWest bank chairman Howard Davies stated at a Bloomberg event that he expects the UK will pilot test the CBDC within 3- 5 years.

With the government and the Bank of England already considering the possibility of a digital pound as CBDC, the Lords’ Economic Affairs Committee has now called for public opinion about the adoption of the same.

Reason for Inquiry into The Digital Pound

Committee  Chairman, Lord Forsyth of Drumlean stated there was a need to discuss issues related to the CBDC program. Additionally, he claims this would help gain a complete understanding of its scope. This will be important if the CBDC project eventually gets approved.

In his words, he said, “New cryptocurrencies have generated a great deal of excitement, and concern, across the globe. The Government and Bank of England must carefully consider the implications of creating a new, state-backed, form of digital cash.”

If implemented, the digital pound will be recognized as legal tender along with traditional fiat and online account balances.

Lord Forsyth hopes that the inquiry will help inform the Committee’s decision. He said, “To inform our work we want to hear from as broad a range of people as possible.”

Thus, the Committee is asking for members of the public to submit evidence detailing the pros and cons of the CBDC over current payment systems. Likewise, comments on the risks, benefits, and effects on the banks and financial institutions, the country’s economy, and what the role of the Central Bank should be are also welcome

Consequently, anyone interested in sharing an opinion on the subject is advised to put the same forward. All evidence is to be submitted by the 15th of October, 2021.