British MPs Express Concerns About Digital Pound

In the published report, lawmakers on the House of Commons Treasury Committee expressed concerns about the UK’s plans for a central bank digital currency (CBDC) at a consultation in February. The government said a digital pound sterling “will likely be needed” in the future.

Both the United Kingdom and the European Union have said in proposals that individual digital currencies should not be allowed to earn interest like bank deposits.

While UK MPs appear to agree with the EU’s proposal for a lower individual holding limit for the digital euro to prevent customer exodus from banks, they do not appear to agree on preventing CBDCs from earning interest and thus treating them like cash.

“We recommend that the Bank of England and the Treasury conduct further analysis on the impact of paying interest on the digital pound sterling on monetary policy, while ensuring that design work does not preclude the possibility of paying interest on the digital pound,” the UK lawmakers said.

*This is not investment advice.