Britain cannot ‘sit out’ digital pound indefinitely, says City minister

A protracted delay in the issuance of a digital pound would have negative effects on banking and the economy, according to Britain's financial services minister on Tuesday.

A digital pound is being evaluated by the Bank of England and the Finance Ministry, with a public consultation scheduled for later this year.

If the UK delays issuing its own digital money permanently, there are some very significant geopolitical issues. The newly appointed City minister Andrew Griffith told the treasury select committee of parliament that others would.

Central bank digital currencies are required to modernize finance and make sure that Big Tech does not seize control of the currency, according to the Bank of International Settlements, a forum for central banks.

Concerned about being left behind by the private-sector bitcoin and other cryptocurrencies used for payments, nearly 90% of the world's central banks are currently utilizing, testing, or researching digital currencies.

"You could end up with some quite difficult consequences in terms of macroeconomic policy, but also the ability to regulate individual transactions," Griffith said. "If the counterfactual is that either private enterprises or states come forward with their equivalent currencies, and the UK, either the government or the Bank of England, have no play at all in that domain."

The BoE was requested to consider the case for a new "Bitcoin" or digital pound last year by Rishi Sunak, who was the finance minister at the time.