According to the economic secretary of the Treasury, a 'digital pound' is being considered for introduction.

According to Andrew Griffith, the UK is determined to become a significant player in the cryptocurrency industry.

In addition, 'establishing a regime for the wholesale use, for payment purposes, of stablecoins is a long way down the road,' as the government puts it.

Stablecoins are digital currencies designed to maintain a stable value relative to a fiat currency or an asset such as gold.

Households and companies could utilize the currency alongside traditional forms of payment, including cash and bank deposits.

'Game-changing' Technology, as the Cliche Goes

Mr. Griffith recently informed the Treasury Select Committee that, in the following weeks, a public consultation would be conducted to discuss the features of a digital pound.

He advocated for the widespread adoption of stablecoins as a form of payment, saying, 'I want to see us build a framework, and this is contained in the FSMB [Financial Services and Markets Bill, which is presently being debated in Parliament].'

Central banks worldwide are creating digital currencies or investigating the possibility of doing so.

For instance, China is ahead of the pack and is experimenting with digital yuan in metropolitan areas like Beijing, Shanghai, and Shenzhen.

The European Central Bank (ECB) initiated a 24-month research phase in July 2021, followed by a 3-year implementation phase, to introduce a digital form of the euro.
Mr. Griffith told the committee, 'it is right to attempt to embrace potentially disruptive technology,' especially given the country's robust fintech and finance sector.

He felt it was essential to test this 'potentially disruptive game-changing technology that can challenge but also turbocharge all of those [financial] industries.'

Protections for Consumers

This rapid decline in Bitcoin and other assets' value, known as the 'crypto winter,' has led many to question whether or not any cryptocurrency can ever be considered stable.
It may also raise several policy issues that need to be addressed.

The public will also be consulted on Britain's first comprehensive approach to regulating crypto assets, where consumer protection has been scrutinized in recent weeks.

The Bank of England and the British government will use the information gleaned from the survey as part of a 'research and exploration' phase to inform their planning for the following years.

Mr. Griffith told the committee that the UK's 'strong financial image' meant getting cryptocurrency regulation right was more important than getting it done first. He said, 'It will be a protracted process.'

Proved Fairness

The European Union (EU) has produced the only comprehensive set of regulations about cryptocurrency exchanges.

They will likely be approved in the next several weeks and implemented in 2024.
Mr. Griffith has suggested that the UK's rules be extended to include decentralized financing, and he said that greater transparency would benefit all parties involved.

He told the committee, 'We want the appropriate system, managed correctly, with the essential balances.'

To 'expose ourselves as regulators and decision-makers,' he also promised to host 'at least' six roundtables with members of the cryptocurrency business.

Tulip Siddiq, the shadow city minister for Labour, has urged the Bank of England to look into the advantages of a central bank digital currency.

According to her, 'a Labour administration would be serious about recruiting FinTech companies to the UK by developing a regulatory environment that encourages innovation to safely harness new technology and our desire to make Britain the world's homegrown start-up center.'

The British government is preparing to hold a public hearing on introducing digital pound currency.

The BBC quoted Economic Secretary to the Treasury Andrew Griffith saying that the British government is considering establishing a digital form of the national currency. He informed the Treasury Select Committee that the government would soon hold a public hearing to discuss the details of a digital pound. Reuters reports that he also said the consultation would note that the event was hypothetical. We have yet to decide if this is indeed inevitable.

Griffith argues that the government must 'get them right' to address the many public policy concerns raised by a digital pound. He dispelled concerns that using a token backed by the state would compromise privacy by explaining that the coin's design would prevent authorities from tracking individual transactions for anything other than illegal activities like money laundering.

Griffith said a privately issued, fiat-backed stablecoin 'would probably get there sooner' than a central bank digital currency (CBDC) developed by the Bank of England for wholesale settlements.

Furthermore, he stated, 'I want to see us develop a framework, and this is under the FSMB, for the wholesale use of stablecoins for payment purposes.' This was about the Financial Services and Markets Bill, which the British Parliament is currently examining.