The U.K. Finance represents over 300 financial institutions in the United Kingdom.
The bank had proposed a ceiling of between £10,000 and £20,000 ($12,700 and $25,400).
A central bank digital currency (CBDC) created by the United Kingdom is being discussed by financial institutions there. One of the major financial membership organizations in the United Kingdom, U.K. Finance, has responded to a consultation of the Bank of England on the potential introduction of a digital pound by publishing their response.
The U.K. Finance, which represents over 300 financial institutions, disagrees with the Bank of England’s proposed limitations on how much money a person might have in this proposed currency.
Far Lower Cap Limit
U.K. Finance recommended a far lower temporary restriction of £5,000 ($6,350) on these assets than the bank planned, in order to prevent panic during times of financial hardship. The bank had proposed a ceiling of between £10,000 and £20,000 ($12,700 and $25,400).
The group also warned that the introduction of a digital pound might “exacerbate” the flight of deposits under certain conditions. The digital pound was only announced in January, when the U.K. government said it was considering issuing it.
The digital pound, called “britcoin” by U.K. Prime Minister Rishi Sunak, is now in the early stages of design, and its issuance is projected by the end of 2023. British politicians are starting to worry about it because they believe the nation might use more resources in the fight against the introduction.
Moreover, they “were really concerned” about a number of hazards associated with granting a CBDC, as indicated by Michael Forsyth, head of the Economic Affairs Committee, in January. A recent study also showed that British people are worried about the increased authority their government would have with a digital pound.