LONDON, UK – According to a report from the Times, the Bank of England has been accelerating plans to develop a Central Bank Digital Concurrency (CBDC), commonly known as the digital pound. While some experts believe that digital currency could improve payment options and provide financial stability, critics point to concerns about personal privacy.

Digital pound unpopular

According to the Times article, the digital pound – dubbed ‘Britcoin’ – will not replace cash under the proposed CBDC system. Despite this, public opinion of CBDCs in Britain is generally negative. Consumers are concerned with financial privacy and infringement on personal freedoms.

In response to the concerns, the Bank of England has launched a public consultation initiative on the digital pound, which began in February and will run until June 7. The initiative invites individuals and businesses to share their concerns and opinions on adopting a digital pound.

The potential impact of a digital pound

Several details are still being worked out, but the Times article provides some critical insights into the potential impact of the digital pound. One key difference between virtual currency and existing card payments is peer-to-peer transfers, the ability to electronically transfer cash from one wallet to another without relying on a central authority such as a bank or provider like Visa. 

On the other hand, there are limitations on the number of digital pounds individuals can hold – one of the most significant concerns. The limitation is due to the need to understand the impact of the CBDC on the financial sector. While this may be a temporary measure, it nonetheless inhibits consumers and businesses from their complete economic activities.

Cybersecurity team recruited

Despite the limitations, the Times says a digital pound is “likely to be needed” in an increasingly digital world. To this end, the Bank of England has recruited a 30-member staff to advise and drive the project, with most members having experience in cybersecurity.

The bank has not decided whether the digital pound would use distributed ledger technology. Still, the bank’s website has listed job openings for a digital pound security architect and digital pound solutions architect. In January, HM Treasury advertised for a head of the central bank digital currency.

Ian Taylor, a board adviser for the trade association Crypto UK, told the Times that “a team of 30 seems like quite a significant resource to focus on the digital pound.” He added that it shows “the impact it would have, and that the bank [is] serious about it.”

Personal privacy in question

While proponents of the digital pound tout the benefits of efficiency and convenience, decentralization advocates like Christopher Blec warn that it could come at a great cost to personal privacy. Blec has encouraged resistance to the CBDC by buying decentralized currencies like Bitcoin and supporting anti-CBDC politicians.

As the Bank of England moves ahead with its plan to develop the digital pound, how the public will respond when implemented in the marketplace remains to be seen. With concerns over privacy and freedom at the forefront of many people’s minds, it will be crucial for the Bank of England to strike a balance between innovation and protecting individual rights.