UK Parliamentary Committee urges further evaluation of digital pound benefits, risks

Previous tests of an English CBDC revealed benefits in issuance, distribution, and privacy

Despite this, the committee expressed concerns, questioning whether the benefits would ultimately outweigh the risks

The United Kingdom Parliamentary Committee, House of Commons, has asked the Bank of England and Treasury to conduct additional consultation to assess the advantages of introducing a digital pound.

The House of Commons Treasury Committee report revealed significant costs incurred by the Bank of England and Treasury in the groundwork and tests for the CBDC. It recommended improved transparency through a separate line item in annual reports from 2024, emphasizing the need to control costs for a project that may not materialize.

While the previous tests of an English CBDC revealed benefits in issuance, distribution, and privacy, the committee expressed concerns about the significant investment required for an official launch. It also questioned whether the benefits would ultimately outweigh the risks.

Lastly, the committee advised England's central bank to be cautious about overstating the digital pound's capabilities and to ensure it doesn't worsen existing financial exclusion issues.

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