Plans for UK “Digital Pound” Face Uncertainty Amid Growing Skepticism

Plans for the introduction of a UK “digital pound” are facing significant challenges as Bank of England officials grow increasingly sceptical about the project. The idea of a central bank digital currency (CBDC), often referred to as “Britcoin,” was initially slated for a formal decision in 2025, with an expected launch by 2030. However, concerns surrounding privacy, costs, and persistent conspiracy theories are raising fresh doubts about whether the digital pound will ever come to fruition.

A digital pound would theoretically offer consumers a secure, electronic form of money, with transactions managed through smartphone apps and underpinned by the safety of central bank backing. However, some critics, including certain politicians and conspiracy theorists, fear that a CBDC could enable the government to monitor and control citizens’ spending. Nigel Farage, leader of the Reform Party, has warned that a digital pound could give the state “total control over our lives.”

These concerns, combined with the practical challenges of creating a national digital currency, have put the project in jeopardy. According to sources familiar with the discussions, Bank of England officials remain divided on whether the benefits of a digital pound outweigh its potential risks. The final decision will ultimately rest with Bank governor Andrew Bailey and Chancellor Rachel Reeves.

The global context is also complicating the UK’s plans. In the United States, lawmakers recently passed an “anti-surveillance” bill in the House of Representatives, aiming to block the launch of a digital dollar unless Congress explicitly authorizes it. Meanwhile, the European Central Bank is expected to make a decision by the end of 2025 on whether to proceed with the development of a digital euro, despite resistance from Germany’s conservative Christian Democrats, who are concerned about user privacy.

This hesitation reflects broader caution over CBDCs, particularly those intended for everyday use by retail customers. While the UK and European authorities initially viewed CBDCs as a necessary response to private stablecoins, such as Facebook’s now-defunct Libra, enthusiasm has waned due to technical and political challenges.

Despite growing skepticism over retail-focused digital currencies, the push for a “wholesale” CBDC, intended for use among commercial banks and financial institutions, remains strong. Policymakers believe that a wholesale CBDC could streamline interbank transactions and reduce systemic risks without raising the same privacy concerns.

A Bank of England spokesperson confirmed that work on the digital pound is still “ongoing,” with no formal decision yet made on whether to proceed. The spokesperson emphasized that, should a digital pound be introduced, it would be accompanied by primary legislation to safeguard user privacy and control over their funds.