Plans for a “digital pound” in the UK have hit a snag as Bank of England officials grow increasingly skeptical about the project, raising doubts that any form of a “British currency” will be introduced before the end of the decade.
The bank and government were due to decide in 2025 whether to go ahead with formal development of a UK central bank digital currency (CBDC), with the original target of an official launch by 2030. Internal concerns over privacy, however, may lead to Potentially rising costs and persistent conspiracy theories have cast new uncertainty over the future of the project.
In theory, a “digital pound” would provide consumers with a secure electronic form of money, with transactions managed via smartphone apps and backed by a central bank-backed safety net. However, some politicians and conspiracy theorists claim that central bank digital currencies could enable governments to restrict or monitor how people spend their money. Nigel Farage, leader of the Reform Party, has gone so far as to warn that the digital pound “will give the state complete control over our lives.”
These concerns – coupled with practical concerns about the cost and complexity of creating a national digital currency – weigh heavily on policymakers at the World Bank. According to sources close to the operation, officials are divided on whether the benefits outweigh the potential risks. Ultimately, the final decision to proceed will be in the hands of Bank Governor Andrew Bailey and Chancellor Rachel Reeves.
International developments also make matters more complicated. In the United States, lawmakers passed an “anti-surveillance” law in the House of Representatives, with the aim of preventing any attempt to launch a digital dollar unless Congress explicitly authorizes it. Meanwhile, the European Central Bank will decide at the end of 2025 whether to go ahead with a digital euro, despite resistance from Germany’s conservative Christian Democrats over user privacy.
These moves reflect broader hesitation about central bank digital currencies, especially those intended for everyday use by retail customers. While authorities in the UK and Europe once viewed these digital currencies as a necessary response to private “stablecoins” such as Facebook’s now-defunct Libra, enthusiasm has faded in the face of technical and political hurdles.
Despite this growing lukewarmness toward retail currencies, the push toward a “wholesale” central bank digital currency — used among commercial banks and financial institutions — remains strong. Policymakers believe bulk issuance could help streamline large interbank transactions and reduce systemic risks, without raising many of the privacy concerns associated with digital money that consumers face.
A Bank of England spokesperson confirmed that work on a digital pound remains “ongoing”, with no formal decision yet on whether to move forward. They stressed that any eventual BritCoin offering would be accompanied by preliminary legislation ensuring user privacy and control over their funds, in an attempt to allay growing public concerns.