The Bitcoin community in the United Kingdom talks about the upcoming CBDC and the launch of the digital pound.
The United Kingdom will be able to “explore the case for a digital pound” with the help of a new position called “head of CBDC.” However, U.K. Bitcoiners might say that this might not be necessary.
His Majesty’s Treasury, which is in charge of the economy and finances of the U.K. government, is looking for a head of central bank digital currency (CBDC) to lead the development of a digital pound. The work is said to be “important, complex, and cross-cutting,” and it will “need a lot of help from people inside and outside of HM Treasury.”
The LinkedIn post says that the Bank of England and the Treasury are working together through the CBDC Taskforce to look into the case for a digital pound. The role of the head of CBDC could help the government of the United Kingdom reach its goal of setting up the company.
Danny Scott, CEO of the U.K.-based Bitcoin (BTC) ($22,551) company CoinCorner, told Cointelegraph that a CBDC could be missing the “actual real-world use and purpose, which is what we often see.”
“Those of us who have been in the industry for a few cycles have seen the fads come and go: altcoins, blockchain, distributed ledger, ICOs, DeFi, and NFTs. Big companies often follow the latest trend so they don’t look like they’re falling behind. Most people put it in the R&D and exploratory category, which makes sense.
Scott, who has worked and built in the Bitcoin space for more than a decade, said that the public could sometimes misunderstand research and development projects in the crypto space and think they are real-world solutions.
“This isn’t too far from a CBDC [digital pound]. Many countries around the world are looking into this and trying to figure out how it would be better than the current system. This will happen; that’s fair.
In fact, the move toward a digital pound is in line with the trend of central banks around the world looking into the possibilities of CBDCs. In Europe, the European Central Bank (ECB) has been looking into the future of a digital euro, and many other countries, such as Sweden and Denmark, are doing the same.
CBDCs claim to have a number of benefits, such as making it easier for people to get money, cutting costs for businesses and consumers, and making the payment system safer and more efficient.
But when Bitcoin became legal currency in El Salvador, as much as 70% of the country’s people who didn’t have bank accounts got them. Also, countries like Nigeria, Ghana, and Kenya can now receive money from anywhere in the world to a mobile phone or Bitcoin exchange account.
Also, making a new digital currency available could be risky. James Dewar, partner at U.K. Bitcoin merchant solution Bridge2Bitcoin and director at Laser Eyes Cards, told Cointelegraph that the “introduction of a CBDC would present different challenges and risks than Bitcoin” because the CBDC requires “trust in third parties, like central banks and governments, to not abuse the supply of the currency.”
“This risk applies at the macro level, just like it does now, but it’s more worrisome with a CBDC because it makes it easier for the government or its agencies to track and control what people spend their money on. “This is a very big danger to our societies’ freedom and property rights.”
He asks, “We may trust one government or another, but do we as citizens trust all future governments, no matter what colour, with this power?” Tony Yates, who used to be the Bank of England’s top adviser, has spoken out against CBDCs. In the same way that Dewar did, he questioned the reasons behind the worldwide spread of CBDCs, calling them “suspicious.”
Dewar went on, saying, “It makes sense for the government to look into the idea properly.” Overall, we worry that political pressure may be put on the process in a way that ignores or downplays the dangers of a CBDC to society.
Money’s “digital” nature is also called into question. Less than 15% of payments in the U.K. are made with physical cash, according to the Bank of England, and as many as 23 million people, or about one-third of the population, did not use cash at all in 2021.
Scott says to the Treasury, “Don’t we already have a digital pound?”
“From the point of view of the final consumer, the pound is mostly digital these days, no matter what mechanism is used.” So, once they are done with their research, I would love to see a list of the benefits and new features a CBDC will bring to the public. In the meantime, Scott will “keep working on Bitcoin and creating a global system that everyone can use.”
Dewar said that there might be hope for Bitcoin and the U.K. government: “The role description says that the rise of private sector money, like Bitcoin, offers exciting opportunities for U.K. businesses and consumers, and we at Bridge2Bitcoin would very much agree with that.” By design, the Bank of England CBDC will be available to Brits, but no official date has been set.