The Bank of England (BOE) seems to be reconsidering its plans to launch a digital pound for users. According to reports, the advantage of a central bank digital currency (CBDC) could no longer be enough to support its implementation.
Reportedly the BOE has been secretly encouraging the private banks to advance payment innovations that could deliver similar benefits as a retail CBDC. The bank remains open to launching a digital pound in the future, but it is increasingly inclined to let private banks take the lead unless a clear need emerges.
This marks a notable shift from the bank’s position in recent years, during which officials expressed confidence that a digital pound would eventually be necessary. The current design phase, being conducted jointly with HM Treasury, will conclude before any final decision is made.
BOE Governor Andrew Bailey has been vocal in his skepticism. While supportive of a wholesale CBDC for interbank transactions, he has questioned the need for a consumer-focused digital currency. Bailey recently stated he’s not yet convinced about the need to create new forms of money.
The broader global landscape also appears to be influencing the BOE’s hesitation. Interest in state-backed digital currencies is fading globally. South Korea has suspended its pilot program and the U.S. has halted further CBDC development under the Trump administration, citing risks to financial stability. The European Central Bank remains one of the few major institutions still pushing ahead with a digital euro.
In the UK, privacy concerns, fears of destabilization during economic crises, and pushback from both lawmakers and conspiracy theory groups have clouded the project. A public consultation drew over 50,000 responses, with many raising critical concerns.
Recent internal BOE research also highlighted how the proliferation of private sector payment technologies, including stablecoins and tokenized deposits, has reduced the urgency for a state-backed digital alternative. These advancements are seen by some central bank staff as sufficient to meet the public’s changing payment needs without introducing CBDC.
Further, both BOE Deputy Sarah Breeden and Treasury’s Director General for Financial Services Gwyneth Nurse have stepped back from leading the CBDC Engagement Forum. Meeting minutes from April cited the project’s entry into a more technical design stage as the reason, though insiders point to wanting institutional momentum.