The UK Bitcoin community reacts to the proliferation of incoming CBDC and the digital pound

The UK government’s Ministry of Economy and Finance, Her Majesty’s Treasury, is hiring the head of central bank digital currency (CBDC) to lead the development of the digital pound. The work is described as “important, complex and cross-cutting” and will “require extensive engagement within and beyond HM Treasury”.

According to a LinkedIn post, the Treasury and the Bank of England are working together through the CBDC Task Force to explore the case for a digital pound. The role of CBDC chief could bring the UK government closer to its goal of rolling out CBDC.

HM Treasury job advert for Head of CBDC. Source: LinkedIn

Danny Scott, CEO of UK-based Bitcoin (BTC), told Cointelegraph that a CBDC could lose “the actual real-world use and purpose that we often see.”

“For those who have been in the industry for a cycle or two, we have seen hype come and go – altcoins, blockchain, distributed ledgers, ICOs, DeFi, NFTs. You see big companies band together and jump on the latest hype to avoid being left behind. For the most part, it’s about R&D and exploration, which is completely understandable.

Scott, who has worked and built in the Bitcoin space for more than a decade, explained that sometimes the public can misinterpret research and development projects in the crypto space and perhaps confuse them with useful real-world solutions.

“CBDC [digital pound] it doesn’t fall far from that. Many countries around the world are looking into this and trying to understand the benefits of this over the existing system – fair enough, it will happen.”

Indeed, the move towards the digital pound is in line with a trend among central banks around the world to explore the potential of CBDCs. In Europe, the European Central Bank (ECB) is actively studying the future of the digital euro, and several countries, including Sweden and Denmark, are also exploring their own digital currencies.

CBDCs claim to offer a number of benefits, including improved financial inclusion, reduced costs for businesses and consumers, and increased security and efficiency in the payment system.

However, El Salvador has banked 70% of its unbanked population with the introduction of Bitcoin as legal tender, while countries such as Nigeria, Ghana and Kenya can now receive money from anywhere in the world via a mobile phone or Bitcoin exchange.

Paying for coffee in El Salvador with Bitcoin. Source: Cointelegraph

Moreover, there are potential risks to the introduction of a new digital currency. James Dewar, a partner at UK-based Bitcoin merchant solution Bridge2Bitcoin and director of Laser Eyes Cards, told Cointelegraph that “the implementation of CBDC will present different challenges and risks than Bitcoin” because CBDC “requires trust in third parties, central banks “. and governments to avoid abusing the supply of foreign exchange”.

“This risk applies at the macro level as it does today, but more worryingly, the CBDC has the ability to track and censor individual spending by the government or its agencies. This is a great risk to freedom and property rights in our societies.”

It raises the question: “While we trust this or that government, do we as citizens trust that power in all future governments, whatever their color?” Former Bank of England General Counsel Tony Yates has spoken out against CBDCs. Echoing Dewar’s sentiments, he questioned the motives behind the global spread of CBDCs, calling them “dubious”.

Dewar continued, “It is reasonable for the government to investigate the idea properly. In general, we are concerned that there may be political pressure on the process that ignores or significantly reduces the risks of CBDC to society.

The “digital” side of money is also in question. The UK is an increasingly digital cash-driven society: less than 15% of payments are made with physical cash, according to the Bank of England, and around 23 million people – around a third of the UK population – have never used cash. generally in 2021.

Cointelegraph’s Joe Hall takes on contactless payments, Bitcoin and the pound sterling in Gibraltar. Source: Cointelegraph

“Don’t we already have a digital pound?” Scott asks the treasury.

“From an end consumer point of view, the pound is largely digital these days, regardless of the mechanism used. So, I would like to see a list of benefits and new features that CBDC will bring to the public after they complete their exploratory phases.

In the meantime, Scott will “continue to focus on Bitcoin and building a global, interoperable system that everyone can participate in.”

Related: Amid cryptocurrency winter, central banks are rethinking domestic digital currencies

Dewar shared that there could be hope for Bitcoin and the UK government: “The role description states that the emergence of private sector currencies such as Bitcoin presents exciting opportunities for UK businesses and consumers, and we at Bridge2Bitcoin would be very happy with that. .” The Bank of England CBDC will be available to Britons by design, although no official timeline has been set.