Treasury’s digital pound gets support from Innovate Finance

The Bank of England and Treasury are exploring the viablity of a digital pound.

Fintech industry body Innovate Finance has said proposals to introduce a digital pound have “tremendous potential” to spur payment innovation in the UK.

Innovate Finance submitted its views to a joint consultation by the Treasury and the Bank of England, which aims to determine whether the UK should build a state-backed digital asset and how this should be approached.

The Bank of England said that a central bank digital currency (CBDC) is “likely” to be needed in future.

It would be similar to a “digital banknote” and issued by the Bank of England for use by households and businesses for everyday payments.

“Innovate Finance is confident that the digital pound, alongside a broader ecosystem of digital payments, including stablecoin, will solidify the United Kingdom’s position as a global leader in payments innovation,” said Janine Hirt, CEO of Innovate Finance.

“The adoption of a retail digital pound, as proposed by the Bank of England, has tremendous potential to stimulate innovation across various domestic markets including rental and e-commerce, foster financial inclusion solutions through integration with a renewable digital ID, and significantly reduce the cost of making and receiving payments for small and medium-sized enterprises across the country.”

The Treasury and Bank of England launched a consultation in February to gather industry views, extending the deadline to the end of June.

While chancellor, Rishi Sunak outlined a vision to make the UK a “global cryptoasset hub”.

However, plans for the Royal Mint to create an NFT were quietly scrapped.