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British lawmakers are urging a cautious approach when it comes to implementing a retail digital pound, emphasizing the importance of finding a balance between technological progress and potential drawbacks. 
Members of the Treasury Select Committee have raised concerns about the possible launch of a retail digital pound, emphasizing the need for careful consideration before taking any steps. 
While acknowledging the potential benefits in terms of innovation, the committee has called on the Bank of England (BoE) and Treasury to conduct a thorough assessment of the necessity of such a move, taking into account both costs and risks. 
In the interim, the committee’s report suggests imposing lower initial limits on the value of retail digital pounds to mitigate the risk of potential bank runs during periods of market instability. 
This precautionary measure aims to discourage large transfers of deposits into digital wallets, which could increase the risk of bank failures and raise borrowing costs. 
The report also addresses privacy concerns, recommending that any legislation introducing a digital pound should strictly restrict the government or the BoE from using data excessively. 
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The committee emphasizes the importance of protecting user privacy and ensuring that the digitization of currency does not lead to unwarranted surveillance. 
In the event of legislation for the introduction of a digital pound, the report proposes explicit limitations on the government and the Bank of England in utilizing data obtained through the digital pound for purposes beyond those already authorized for law enforcement. 
Committee chair Harriett Baldwin stressed the need for compelling evidence before considering the introduction of a retail digital pound. 
She emphasized the requirement for clear proof that its implementation would benefit the UK economy without increasing risks or incurring unmanageable costs. 
Baldwin asserted that the decision to integrate it into the financial system should be based on a comprehensive evaluation of these factors. 
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While endorsing the Bank of England’s ongoing design efforts, UK lawmakers have called for transparency regarding project costs. 
Baldwin highlighted the importance of a concise cost-benefit analysis to ensure that introducing a retail digital pound aligns with broader goals of economic stability and financial inclusion. 
Meanwhile, in a separate development, investment managers in the United Kingdom are receiving regulatory support to embrace blockchain technology for tokenizing funds, moving away from traditional record-keeping systems, thus embracing innovation in the financial sector. 
<a href="https://www.cryptointelligence.co.uk/crypto-intelligence-blockchain-council/">Discover the Crypto Intelligence Blockchain Council</a>

British Legislators Urge Cautious Approach to Retail Digital Pound Implementation

Crypto Intelligence

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