Lobby groups and crypto companies in the U.K. are generally welcoming of the government’s plans for a digital pound, said Lisa Cameron, chair of the crypto and digital assets All Party Parliamentary Group. A digital pound could bring a number of opportunities from potentially enhancing and improving our existing payment systems; providing an alternative to other forms of payment; and potentially spur further innovation across the sector.
The U.K. government opened its plans for a digital pound for public comment in February, and responses are now coming in with the deadline for the consultation set to close on June 30. Crypto industry stakeholders are concerned about how users’ privacy will be preserved, and if a digital pound will be designed in an innovation-friendly manner. Others worry the Bank of England’s (BoE) planned holding limits for a digital pound are insufficient. The BoE has proposed a limit of 10,000 to 20,000 digital pounds per individual for at least the introductory period of the CBDC.
The International Regulatory Strategy Group (IRGS) said it recognizes the need for the U.K. to stay competitive in the digital space but urged the government to consider a lower limit in its response to the BoE. Kene Ezeji-Okoye, co-founder at U.K.-based blockchain infrastructure provider Millicent, said the open infrastructure of the proposed digital pound could enable programmability or automatic transfers with the help of smart contracts should the government allow it.
Varun Paul, director for CBDC at institutional crypto custody platform Fireblocks, said the digital pound system would be even more innovative and future proof if it worked with crypto. Paul said the U.K. central bank needs to develop a token-based solution that is fit for the future. Lobby groups also said that they wanted the digital pound to be used globally.
Stakeholders urged the government to take a cautious approach – particularly when it comes to ensuring privacy. Five stakeholders CoinDesk spoke to, including CryptoUK and IRGS, said they agreed with the government’s proposal that the BoE should not have access to users’ personal data.