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Wednesday, January 11, 2023

UK Considers the Implications of the Digital Pound

  Implications need to be very closely examined.   Is 'long way down the road' they say

Cryptocurrency: UK Treasury considers plan for digital pound  By Shiona McCallum, Technology reporter   in the BBC.  (Updated)

The government is considering introducing a national cryptocurrency or "digital pound", the economic secretary to the Treasury has told MPs.

The UK was committed to becoming a world crypto hub, Andrew Griffith said.  And the government was "a long way down the road... to establish a regime for the wholesale use, for payment purposes, of stablecoins"., Stablecoins are designed to have a predictable value linked to traditional currencies or assets such as gold.

'Game-changing technology'

A public consultation on the attributes of a digital pound would be launched in coming weeks, Mr Griffith told the Treasury Select Committee.

"I want to see us establish a regime, and this is within the FSMB [Financial Services and Markets Bill, currently being debated in Parliament], for the wholesale use for payment purposes of stablecoins," he said,  Central banks around the world are developing or exploring digital currencies.

And Mr Griffith told the committee: "It is right to look to seek to embrace potentially disruptive technologies, particularly when we have such a strong fintech and financial sector."

He wanted to allow the opportunity for this "potentially disruptive game-changing technology that can challenge but also turbocharge all of those [financial] industries", he said.

Consumer protection

The "crypto winter", a rapid decline in the value of Bitcoin and other assets and , has intensified concerns about whether any cryptocurrency can ever be considered stable.

It also has the potential to raise many public-policy issues.

And there will also be a public consultation on Britain's first general regulatory approach to crypto assets, a sector where consumer protection has come under scrutiny in recent weeks.

But the consultation will form part of a "research and exploration" phase and will help both the Bank of England and the government develop the plans over the following few years.  ... ' 

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