Evolution

Bank AI

Bitcoin ETF

Polygon

As the financial landscape evolves, UK lawmakers are advocating a cautious approach to the introduction of a retail digital pound, emphasizing the need for balance between technological innovation and potential risks. Meanwhile, the <a href="https://coingape.com/just-in-bank-of-england-may-soon-launch-cbdc/" target="_blank" rel="noopener">proposed digital currency</a>, set to be launched in the second half of the decade, is prompting discussions about its impact on financial stability, privacy, and the future of cash. 
<h2 id="uk-s-digital-pound-dilemma">UK’s Digital Pound Dilemma</h2> 
Lawmakers on the Treasury Select Committee have voiced concerns about the potential introduction of a retail digital pound, emphasizing the importance of careful consideration before implementation. While acknowledging the potential benefits in terms of innovation, the committee urged the Bank of England (BoE) and Treasury to critically evaluate whether such a move is necessary, taking into account associated costs and risks. 
Meanwhile, the committee’s <a rel="nofollow" href="https://committees.parliament.uk/committee/158/treasury-committee/news/198770/development-of-a-bank-of-england-retail-digital-pound-should-proceed-with-caution-mps-warn/" target="_blank">report</a> suggested implementing smaller initial limits on the value of retail digital pounds to mitigate the risk of potential bank runs during market turmoil. Notably, this precaution aims to prevent large-scale shifts of deposits into digital wallets, which could increase the risk of bank failures and elevate loan costs. 
In addition, privacy concerns were addressed, with the report recommending that any legislation introducing a digital pound should strictly limit the use of data by the government or the BoE. The committee stressed the importance of protecting user privacy and ensuring that the digitization of currency does not enable unwarranted surveillance. 
Meanwhile, the report suggests that if there is legislation to introduce a digital pound, it should explicitly restrict the Government and Bank of England from utilizing the data obtained from the digital pound for purposes other than those already authorized for law enforcement. 
Also Read: <a href="https://coingape.com/hashdex-submits-amended-bitcoin-etf-filing-to-us-sec-bloomberg/" target="_blank" rel="noopener">Hashdex Submits Amended Bitcoin ETF Filing To US SEC</a> 
<h2 id="chair-s-caution-and-call-for-transparency">Chair’s Caution and Call for Transparency</h2> 
The chair of the committee, Harriett Baldwin, highlighted the importance of having substantial evidence before considering the implementation of a digital pound for retail use. She emphasized that there should be clear proof that introducing a retail digital pound will bring advantages to the UK economy without raising risks or resulting in unmanageable costs. The decision to integrate it into the financial system should be based on a thorough evaluation of these factors. 
In addition, she emphasized the importance of modernizing the use of money while preserving economic stability and individual security. Baldwin urged the BoE and Treasury to proceed with caution, considering the potential impacts on financial exclusion for those reliant on physical cash. 
While supportive of the ongoing design work by the BoE, the UK lawmakers called for transparency regarding the costs associated with the project. Baldwin highlighted the necessity of a clear cost-benefit analysis, ensuring that the introduction of a retail digital pound aligns with the broader objectives of economic stability and financial inclusion. 
Also Read: <a href="https://coingape.com/okx-drives-web3-evolution-with-strategic-investment/" target="_blank" rel="noopener">OKX Drives Web3 Evolution With Strategic Investments In India Partnering With Polygon</a> 
The post <a rel="nofollow" href="https://coingape.com/uk-lawmakers-urge-caution-in-introduction-of-retail-digital-pound/">UK Lawmakers Urge Caution In The Introduction Of Retail Digital Pound</a> appeared first on <a rel="nofollow" href="https://coingape.com">CoinGape</a>.

UK Lawmakers Urge Caution In The Introduction Of Retail Digital Pound

Table of Contents

Coingape News Media

Other articles published on Dec 2, 2023

Dogecoin (DOGE) and Shiba Inu (SHIB) Prices Gears For Bull Run, Pepe Behind This Time?

Bitcoin Miners Stunned by Revenue Drop of 30 Percent

Grayscale Executives Update Investors About GBTC’s Approval As Spot Bitcoin ETF

XRP Lawyers Call For Congressional Action On SEC And Gary Gensler

Beam Network: A Privacy-Focused Crypto for the Gaming Industry

Bitcoin Touches the $39,000 Threshold: Popular Analyst il Capo Explains What to Expect Next

Join our free newsletter for daily crypto updates!