Summary of UK authorities’ response to consultation > The Institute of International Finance

This staff note summarizes the responses of the Bank of England (Bank) and United Kingdom (UK) Treasury (together, the UK authorities) to their consultation on a digital pound, the UK’s central bank digital currency (CBDC) project. 

These are set out in the UK authorities’ response to their joint consultation paper on a digital pound, and the Bank’s response to its technology working paper, both released on January 25. In the newly released papers, the authorities summarize the submissions they received, respond to some of the points made, and set out next steps in the digital pound project. 

This note additionally compares the responses to key points advocated by the IIF in its own response to the consultations in June 2023. Some of the points of expected ongoing concern will be around the level of holding limits (which we think are too high) and how they will be enforced, consistently with the UK authorities’ commitment to user privacy; the costs and liabilities that may be imposed by the project on banks and other payment interface providers (PIPs); the potential for the Bank to unilaterally change key parameters around the attractiveness of the digital pound such as whether it will pay interest on wallet balances; and the potential complexity of the project if point of sale payments are in scope early on.