Question to the HM Treasury:

To ask the Chancellor of the Exchequer, when he expects to publish the findings of the consultation on the digital pound.

HM Treasury and the Bank of England judge that a UK central bank digital currency (CBDC), the “digital pound”, is likely to be needed in the future. However, a final decision on its introduction has not yet been made and will be informed by public consultation and future work.

On 7 February 2023, HM Treasury and the Bank of England published a joint consultation paper setting out analysis on the case for the digital pound and consulting on the key features of a potential model. The consultation closed on 30 June, and we are now assessing the responses. We are committed to being transparent about the views and issues raised by respondents and we will publish a consultation response publication in due course.

As we enter the design phase of work following the closure of the consultation, HM Treasury and the Bank of England will continue to engage with a wide range of stakeholders across the United Kingdom, including with civil society groups and consumer representatives, on the digital pound proposal and as part of our efforts to have an open and national conversation about the future of our money.

The CBDC Engagement Forum consists of senior stakeholders from industry, civil society including consumer groups, and academia to gather strategic input on policy considerations and functional requirements pertaining to the digital pound. The Forum will continue to play an important role in the design phase, helping the Bank and HM Treasury understand the practical challenges of designing, implementing and operating a digital pound. The Technology Forum engages stakeholders and gathers input on all technology aspects of CBDC from a diverse cross-section of expertise and perspectives. The Forum helps the Bank to understand the technological challenges of designing, implementing and operating a digital pound. The membership of these Forums is available on the Bank of England website.

The digital pound would sit alongside cash, not replace cash, and would be subject to rigorous standards of privacy and data protection. UK authorities remain committed to protecting access to cash. In recognition that cash continues to be relied on and used by many people, including vulnerable groups and the elderly, the Government has legislated to protect access to cash across the UK as part of the Financial Services and Markets Act 2023. The Act establishes the Financial Conduct Authority as the lead regulator for access to cash with responsibility and powers to seek to ensure reasonable provision of withdrawal and deposit facilities.

Regarding costs associated with the digital pound, further work will be undertaken through the design phase to evaluate the commercial proposition. The digital pound would be widely accessible to the public, and exist alongside and be easily exchangeable with cash and bank deposits. We would therefore expect there to be no additional costs to consumers accessing a digital pound compared to existing payment methods.

Financial inclusion will continue to be an important consideration for HM Treasury and the Bank as the next phase of work on the digital pound begins. We have consulted and will continue to engage with a wide range of organisations, including those representing vulnerable groups, in order to get their feedback on the proposal. We understand that not everyone has access to a stable internet connection or smartphone, or that some people may find smartphones difficult to use. We are therefore looking at how the digital pound could be delivered through options such as physical cards, in a way that would help to support financial inclusion and accessibility. We will also continue to explore options for offline payments.

The Government’s ambition is to connect at least 85% of UK premises to gigabit-capable broadband by 2025, and for nationwide connectivity (at least 99%) to be realised by 2030. Project Gigabit is the government’s £5bn programme that will ensure the whole of the UK benefits from gigabit connectivity by providing subsidy to deliver gigabit-capable connectivity to uncommercial premises, which are typically in rural or remote locations. The Government is also ensuring that very hard to reach areas will have access to improved broadband, even where gigabit is not possible, with an £8m fund for new satellite connectivity connecting 35,000 of the most remote premises.