UK launches consultation for state-backed 'digital pound' to modernise payments. The Bank of England and the UK Treasury have started a consultation process to explore the possibility of introducing a state-backed digital currency (CBDC), the "digital pound". The bodies argue that a digital pound, which would be issued by the Bank of England, may be necessary in the future as the use of cash and cards continues to evolve. The currency would be designed to offer a trusted, accessible, and easy-to-use digital payment option and will not significantly change the way Britons use money.

The consultation process, which is expected to last for four months, will involve further research and development work by the Bank of England, as well as public involvement. If the proposal gets the green light, there would be a significant investment required to launch the currency, which could occur during the latter half of the decade. The currency would be issued and held by the Bank of England, but intermediaries, such as consumer banks or other businesses, would be required to facilitate spending.

Andrew Bailey, the governor of the Bank of England, said that the case for a digital pound continues to grow as the world becomes more digitalized, but there are a number of implications that must be carefully considered. Tulip Siddiq, Labour's shadow city minister, welcomed the Bank of England's exploration of the potential benefits of a safe and stable CBDC, which she considers a welcome contrast to the government's promotion of the crypto wild west.

Several other countries, including the US, China, and the Eurozone, are also considering similar proposals. Source: Investomania