fbpx

Government confirms privacy protections for digital pound

digital pound privacy Image credit: gabriel12 / Shutterstock

The Bank of England has said that neither it nor the government will be able to access user data related to the use of the upcoming digital pound.

The UK’s central bank, along with the Treasury, confirmed on Thursday that if the digital pound – a state-backed cryptoasset – were to be implemented, legislation would be introduced to “guarantee user privacy and control”.

The concept of a state-backed digital currency was revealed to be in development by the Treasury in January 2023.

Privacy was a major concern holding back the progress of the digital pound, according to consultations.

Sarah Breeden, the deputy governor for financial stability, told the Treasury Select Committee in September last year that “concern about privacy” was holding back the project.

Economic Secretary to the Treasury Bim Afolami said: “We are at an exciting time of innovation in money and payments, and we want to ensure the UK is ready should a decision to build a digital pound be taken in the future.

“We will always ensure people’s privacy is paramount in any design, and any rollout would be alongside, not instead of, traditional cash.”

No final decision on whether the project will materialise has been made, however, the Treasury and Bank of England have said it is “likely” to happen.

Blockchain trade body CryptoUK welcomed the privacy guarantee, however, a spokesperson criticised the “lack of clarity and direction” for the implementation of the technology.

“As the industry continues to evolve and our members demand more certainty from regulators and lawmakers, this current lack of clarity and direction risks creating uncertainty and frustration for digital asset businesses in the UK,” the spokesperson said.