MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.
The MPs said in a report they were worried that creating an electronic form of currency – held directly with the Bank of England rather than commercial lenders such as Barclays, NatWest or Santander – could pose risks to the UK’s financial stability without careful management.
“It must be clearly evidenced that a retail digital pound will provide benefits to the UK economy without increasing risks or leading to unmanageable costs before any decision is taken to introduce it into our financial system,” said the committee’s Conservative chair, Harriett Baldwin.
MPs said ministers also needed to “alleviate privacy concerns” that the government or third parties could misuse personal data, by either tracking or controlling how users spend their digital funds.
“While we support the Bank of England’s plan to continue working on the design of a potential retail digital pound, I would urge them to proceed with caution and maintain a genuinely open mind as to whether one is actually needed.”
The Bank and Treasury said in a joint statement that they welcomed the report and would respond in due course: “We will also shortly publish the response to our consultation paper setting out the next steps.
The original article contains 547 words, the summary contains 241 words. Saved 56%. I’m a bot and I’m open source!
This is the best summary I could come up with:
MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.
The MPs said in a report they were worried that creating an electronic form of currency – held directly with the Bank of England rather than commercial lenders such as Barclays, NatWest or Santander – could pose risks to the UK’s financial stability without careful management.
“It must be clearly evidenced that a retail digital pound will provide benefits to the UK economy without increasing risks or leading to unmanageable costs before any decision is taken to introduce it into our financial system,” said the committee’s Conservative chair, Harriett Baldwin.
MPs said ministers also needed to “alleviate privacy concerns” that the government or third parties could misuse personal data, by either tracking or controlling how users spend their digital funds.
“While we support the Bank of England’s plan to continue working on the design of a potential retail digital pound, I would urge them to proceed with caution and maintain a genuinely open mind as to whether one is actually needed.”
The Bank and Treasury said in a joint statement that they welcomed the report and would respond in due course: “We will also shortly publish the response to our consultation paper setting out the next steps.
The original article contains 547 words, the summary contains 241 words. Saved 56%. I’m a bot and I’m open source!