London, 12 March 2020 – The Bank of England has today published a discussion paper which recognises the benefits of a central bank digital currency (CBDC) – a proposal for a digital version of cash pioneered by research and campaign group Positive Money.

Britain’s central bank recognised a number of opportunities offered by a CBDC. These include avoiding the risks of new forms of private money creation, improving the availability and usability of central bank money and addressing the consequences of a decline in physical cash.

The paper was announced in yesterday’s Budget, with the government saying it “looks forward” to its publication. 

Welcoming the paper, David Clarke, head of policy at Positive Money, said:

“With the decline of physical cash, we risk surrendering even more power over our money and payments system to unaccountable private interests. It is timely that the government and Bank of England are working together to explore the benefits of a central bank digital currency, which would allow us to keep a form of public money and enable democratic control to be exercised over the monetary system.

“The government and central bank must continue to work together to accelerate efforts to issue a digital currency before they are beaten to it by the likes of Facebook. If action comes too late we may see an irreversible loss of public control over our money and banking system.”

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Notes

1. Central banks across the world are developing plans to issue their own digital currencies. The case for central bank digital currencies (CBDCs) was pioneered in Positive Money’s 2016 report ‘Digital Cash: Why central banks should start issuing electronic money’. Positive Money will be publishing further research on CBDCs later this year.
2. The Bank of England’s paper can be viewed here: https://www.bankofengland.co.uk/paper/2020/central-bank-digital-currency-opportunities-challenges-and-design-discussion-paper
3. The CBDC discussion paper was announced on page 100 of the Budget 2020, which said “The government looks forward to the publication of the Bank of England’s discussion paper on a possible UK central bank digital currency (CBDC). The UK will continue to take a leading role in exploring digital currencies, and the wide-ranging opportunities and challenges they could bring.” https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/871799/Budget_2020_Web_Accessible_Complete.pdf
4. Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org
5. For any questions or to speak with a spokesperson please contact simon.youel@positivemoney.org.uk or 07817765517