A ‘digital pound’ might be around the corner as the UK embraces crypto

There will be a public consultation in coming weeks on Britain’s first general regulatory approach to cryptoassets

With a possible crypto bro in Downing Street, plans for a ‘digital pound’ is slowly taking shape.

On Tuesday, Britain’s Financial Services Minister Andrew Griffith said that getting the design of a digital pound right is a bigger priority than a rapid launch.

China has pushed ahead with piloting a digital yuan and the European Central Bank is studying a digital euro, piling pressure on Britain to do the same and keep abreast of advances in financial technology.

In line with this, the finance ministry is due to launch a public consultation on the attributes of a digital pound in the coming weeks.

This will be Britain’s first general regulatory approach to crypto assets, a sector where consumer protection has come under scrutiny in recent weeks.

‘The consultation is going to say this is an if and not a when. We are not fully into the inevitability of doing this,’ Griffith told the UK parliament’s Treasury Select Committee.

Andrew Griffith during day three of the Conservative Party annual conference at the International Convention Centre in Birmingham. Picture date: Tuesday October 4, 2022. PA Photo. See PA story POLITICS Tory. Photo credit should read: Jacob King/PA Wire

Britain’s Financial Services Minister Andrew Griffith said that getting the design of a digital pound right is a bigger priority than a rapid launch (Picture: PA)

A digital pound raised many public policy issues, he said.

‘We have got to get them right. I would rather be right than be first,’ Griffith said. ‘It will be a long lead-time activity.’

The first case use of a digital pound would probably be in the settlement of wholesale financial transactions, he added.

But given public policy considerations for a digital currency, a wholesale, private fiat-backed stablecoin would probably get there first, Griffith said.

The European Union is also due to publish a draft law this year to legally set up and regulate a digital euro.

The European Union has set out the world’s first comprehensive set of rules for regulating crypto markets, which are due to receive final approval in the coming weeks, and come into effect in 2024.

Griffith said the UK rules could be broader to include decentralised finance.

Last year was a tough one for the crypto industry as cryptocurrency’s market value crashed to less than $1 trillion in June.

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