Innovate Finance and other major players in the FinTech industry have expressed their support towards the Bank of England’s proposed digital pound. This new currency, also known as a Central Bank Digital Currency (CBDC), is believed to enhance innovation in the UK and position it as a global leader in payment systems. The Bank of England and HM Treasury note that the country will likely require a digital currency for establishing financial stability.
Adam Jackson, Director of Policy at Innovate Finance, affirms that the digital pound will reinforce the UK’s position as a leader in payments, and the industry body strongly supports the introduction of this new currency. If approved, the digital pound will be a digital currency, similar to a banknote, that can be used to make payments online and in-store.
Khalid Talukder, co-founder of DKK Partners, highlights the importance of the digital pound in facilitating international trade while promoting the growth of the UK economy. The technological advancements for CBDC can promote financial inclusion within the country and extend to reach emerging markets that require new payment systems. The digital pound, however, will not replace the use of cash.
Professor Davie Skeie from the Gillmore Centre for Financial Technology believes that CBDC has a crucial role in the UK FinTech space, leading to greater innovation for businesses in sectors across the UK and the world. The use of common technology for CBDC can speed up and reduce the cost of payments, especially for overseas transactions.
HM Treasury and the Bank of England conducted a consultation on the digital pound in June, outlining key features for the currency. A decision on the formal introduction of the digital pound is expected by 2025. Research centers will play a crucial role in developing the CBDC, addressing important design implications and ensuring wider digital access.
To sum up, the proposed digital pound has gained strong support from the FinTech industry as it positions the UK as a global leader in payment systems and promotes innovation in the sector. If introduced, the digital pound will be a digital currency that can be utilized for online and in-store payments. The UK government expects to make a final decision on the digital pound by 2025, ensuring research centers play a significant role in its development.