Earlier today, Positive Money submitted a statement signed by thousands of supporters to MPs on the powerful Treasury Select Committee. The statement makes the case for Digital Cash, and asks the Committee to recognise the idea’s widespread support.
We’re happy to report that this afternoon, we submitted a statement signed by 5,468 people to the Treasury Select Committee. We’re delighted that so many people supported the statement, and want to extend our heartfelt thanks to all those who added their name. Along with our evidence, we’ve made a strong proposal to the Treasury Select Committee. The full statement read:
With the ongoing decline of physical cash, the UK is more and more reliant on a handful of big banks. This means that the economy is at risk from banks’ lending activities, and banks have to be propped up by taxpayer money.
We believe that it is time to take advantage of new technology to reshape money and payments in the public interest.
We therefore support proposals for the Bank of England to issue a digital version of cash, alongside physical notes and coins. This would take the form of a risk-free, publicly-issued electronic money.
The Bank of England already issues digital currency in the form of deposits held by commercial banks in accounts at the Bank of England. It can provide Digital Cash simply by making these accounts available to non-bank companies and individuals.
Doing so would make our payments system more resilient, reduce our reliance on a small number of unaccountable institutions, and help stimulate competition and innovation in payments services.
We call on the Treasury Select Committee to recognise the clear benefits of Digital Cash and the public support for it represented by this petition, and to recommend its introduction.
The Treasury Select Committee – a cross-party group of MPs which scrutinises the work of the Treasury and Bank of England – will consider our evidence as part of its inquiry into digital currencies and distributed ledger technology. The inquiry will cover the role of digital currencies in the UK, including the opportunities and risks that digital currencies may bring to consumers and businesses. It will examine the potential impact of distributed ledger technology – such as blockchain – on financial institutions, including the central bank, and financial infrastructure. It will also scrutinise the regulatory response to digital currencies from the Government, the Financial Conduct Authority, and the Bank of England, and how regulation could be balanced to provide protection for consumers and businesses.
Along with the joint statement, we also made a longer submission laying out the arguments for Digital Cash in more detail.
What happens next?
Over the next few weeks, the Committee will consider all the written evidence submitted as part of the inquiry. They’ll then invite specific groups or individuals, such as ministers and civil servants, to appear before them to be questioned in public. They may also choose to call in expert groups such as Positive Money.
After these hearings have been completed, we expect the Committee to produce a report giving its opinion on the evidence it’s heard. This is likely to contain recommendations to the relevant government departments, and possibly to other organisations such as regulators or the Bank of England. We hope that the report will include a recommendation for the Bank of England and Government to work together to introduce Digital Cash.
The report will be presented to the House of Commons, and the Government has to issue a response to the recommendations within eight weeks of its publication.
Why is this an important opportunity?
Although the Bank of England is already researching Digital Cash, it is not clear that it has the support of Governor Mark Carney. It’s unlikely that Digital Cash will be adopted unless the Government shows leadership.
Reports from select committees are taken seriously because they represent the consensus opinion of a cross-party group of MPs, informed by stakeholders and experts from academia, industry and civil society. If the Committee were to make a recommendation for the introduction of Digital Cash, it would be very difficult for the Government and Bank of England to ignore the Committee’s recommendation.
Click here for answers to some frequently asked questions about our Digital Cash proposal.