Bank of England Rethinks Digital Pound as Doubts Grow Over CBDC Necessity

The Bank of England (BoE) is reportedly reconsidering its plans to introduce a central bank digital currency (CBDC), commonly referred to as the digital pound, due to mounting doubts about its usefulness and potential impact on the financial system. According to Bloomberg, sources familiar with the matter said the BoE is now leaning toward encouraging commercial banks to lead innovation in payments rather than rolling out a state-backed digital currency.

BoE Governor Andrew Bailey recently expressed skepticism during a Parliamentary hearing, suggesting that successful innovation in the private sector might eliminate the need for a new government-issued form of money.
“I think that’s a sensible place to do it,” Bailey told the Treasury Committee. “If that’s a success, I question why we need to introduce a new form of money.”

This marks a major shift from the central bank’s earlier stance. In 2023, Bailey had stated, “On the basis of our work to date, the Bank of England and HM Treasury judge that it is likely a digital pound will be needed in the future.”

The UK has been relatively slow in developing its CBDC compared to other countries. According to the Atlantic Council, the project remains in the development phase, lagging behind jurisdictions that are already piloting or have launched digital currencies. Although no official decision has been made, the digital pound initiative has been met with skepticism from various groups, including lawmakers and privacy advocates. A public consultation drew over 50,000 responses—most of them critical—amid concerns about surveillance, financial stability, and potential dominance by foreign or Big Tech stablecoins.

Across the Atlantic, resistance to CBDCs has also been gaining traction. The U.S. House of Representatives recently passed the Anti-CBDC Surveillance State Act, which seeks to prohibit the Federal Reserve from developing or testing a CBDC without congressional approval. Earlier this week, Republican Congresswoman Marjorie Taylor Greene warned that the GENIUS Act, aimed at regulating stablecoins, could offer a “backdoor” for the government to introduce a CBDC disguised as a private crypto token.

Despite the pushback in the UK and U.S., many countries are still actively exploring digital currencies. The Atlantic Council reports that only three nations—the Bahamas, Jamaica, and Nigeria—have officially launched a CBDC. Meanwhile, 49 countries are in the pilot stage, 20 are in development, and 36 are still in the research phase.