Bank of England to scrap digital pound amid private sector push

The Bank of England is reportedly reconsidering its plans for a central bank digital currency (CBDC) due to doubts about its necessity and potential risks to the financial system.

Governor Andrew Bailey has openly questioned the need for a state-backed digital pound if private sector innovations prove successful, signaling a major shift in the Bank of England’s stance.

The move comes as global enthusiasm for CBDCs wanes, with the UK lagging behind other nations in digital currency development.

Meanwhile, privacy concerns and fears of bank runs have fueled public opposition, complicating the Bank’s path forward.

Bank of England governor casts doubt on CBDC necessity

Speaking at a Treasury Committee hearing, Bank of England Governor Andrew Bailey emphasized his skepticism about launching a digital pound.

“If [private] innovations succeed, I question why we need to introduce a new form of money,” Bailey stated, suggesting that commercial banks could drive payment advancements without government intervention.

This shows a stark reversal from the Bank of England’s 2023 position, where Bailey asserted that a digital pound was “likely needed” for future financial stability.

UK falls behind in global CBDC race

According to the Atlantic Council, the Bank of England’s digital currency project remains in the development phase, trailing behind more advanced initiatives in Europe and Asia.

“The UK’s cautious approach contrasts with the 49 countries already piloting CBDCs,” noted a Bloomberg analyst familiar with the discussions.

Public sentiment has also been a hurdle. A recent consultation by the Bank drew over 50,000 responses—many critical—raising fears over privacy and financial instability.

Political and public resistance mounts

The Bank of England’s CBDC plans have faced backlash from lawmakers and conspiracy theorists alike. Critics argue that a digital pound could enable excessive surveillance or trigger bank runs during crises.

“A state-backed digital currency risks undermining trust in the banking system,” warned a UK finance expert speaking anonymously.

The opposition is similar to trends in the US, where Congress recently passed a bill blocking the Federal Reserve from issuing a CBDC without legislative approval.

Global CBDC landscape: A mixed picture

While the Bank hesitates, three nations—the Bahamas, Jamaica, and Nigeria—have fully launched CBDCs. Another 49 are in pilot phases.

“The UK’s delay could leave it at a competitive disadvantage,” said a fintech researcher at the Atlantic Council.

However, with stablecoins and private payment innovations advancing rapidly, the Bank of England may yet pivot away from a digital pound entirely.