UK Bitcoin community reacts to incoming CBDC and digital pound rollout

UK Bitcoin Community reacts on CBDC and digital Pounds

The United Kingdom will be able to “explore the case for a digital pound” with the assistance of a new position known as “head of CBDC,” although U.K. Bitcoiners argue that this may not be necessary.

His Majesty’s Treasury, the UK’s economic and finance ministry, is looking for a head of central bank digital currency (CBDC) to lead the creation of a digital pound. It is stated that the work will “require extensive engagement across and beyond the HM Treasury” and is “important, complex, and cross-cutting.”

The Treasury and Bank of England are collaborating with the CBDC Taskforce to investigate the case for a digital pound, as stated in the LinkedIn post. The position of head of CBDC may help the British government get closer to implementing a CBDC.

According to Danny Scott, CEO of CoinCorner, a Bitcoin company based in the United Kingdom, a CBDC might not have the “actual real-world use and purpose, which is what we often see.”

“For those who have been in the business for a few cycles, we have seen the hype come and go, including ICOs, DeFi, NFTs, blockchain, and altcoins. In order to avoid appearing to be behind the competition, large businesses frequently capitalize on the most recent hype. For the most part, it falls under R&D and exploratory, which is understandable.

Scott, who has been working and building in the Bitcoin space for more than a decade, explained that the general public might sometimes misunderstand the crypto space’s research and development projects and possibly confuse them with useful solutions from the real world.

A CBDC (digital pound) doesn’t fare much better. It’s understandable that many nations are investigating this and attempting to comprehend its advantages over the current system.

Indeed, the trend among global central banks to investigate CBDCs’ potential matches the move toward a digital pound. The future of a digital euro has been the subject of intensive research by the European Central Bank (ECB) in Europe, and a number of nations, including Sweden and Denmark, are also pondering the creation of their own digital currencies.

CBDCs claim to provide a number of advantages, such as increased security and efficiency in the payment system, reduced costs for businesses and consumers, and improved financial inclusion.

With the introduction of Bitcoin as legal tender, El Salvador was able to bank up to 70% of its unbanked population, and countries like Nigeria, Ghana, and Kenya are now able to receive money from anywhere in the world to a mobile phone or Bitcoin exchange account.

In addition, introducing a brand-new digital currency carries potential dangers. According to James Dewar, a director at Laser Eyes Cards and a partner at Bridge2Bitcoin, a U.K. Bitcoin merchant solution, “introduction of a CBDC would itself present different challenges and risks than Bitcoin.” This is due to the fact that the CBDC requires “trust in third parties, central banks, and governments, to not abuse the supply of the currency.”

This risk still exists at the macro level, but with a CBDC on the government’s or its agencies’ ability to monitor and censor individual spending, it becomes even more concerning. Our societies’ freedom and property ownership rights are greatly endangered by this.

He asks, “While we may trust one government or another, do we as citizens trust all future governments with this power, regardless of color?” CBDCs have been criticized by Tony Yates, a former senior adviser to the Bank of England. He questioned the “suspect” motives behind the global rollout of CBDCs, which resonated with Dewar.

“It is reasonable that government investigate the idea properly,” Dewar went on to say. Overall, we are concerned that political pressure may be applied to the process in such a way that the risks posed by a CBDC to society are ignored or significantly downplayed.

Additionally, the “digital” aspect of money is questioned. The United Kingdom is becoming increasingly digital cash-based: According to the Bank of England, less than 15% of payments are made with actual cash, and as many as 23 million people, or roughly one-third of the population of the United Kingdom, did not use cash at all in 2021.

“Don’t we already have a digital pound?” Scott asks the Treasury.

“Regardless of the mechanism employed, the pound is largely digital these days from the perspective of the end consumer. As a result, I’d love to see a list of the new features and benefits a CBDC will bring to the public once they finish their exploratory phase.

Scott will “continue to focus on Bitcoin and making a global, interoperable system in which everyone can participate” in the interim.

Dewar mentioned that Bitcoin and the British government might have a chance of success: We at Bridge2Bitcoin wholeheartedly concur that the emergence of private sector money, such as Bitcoin, presents exciting opportunities for U.K. businesses and consumers, as noted in the role description. Brits will, by design, be able to access the Bank of England CBDC, though no official date has been established.