The UK is still in the design phase of digital currency as the EU comes under political pressure to accelerate the development of a digital euro to bolster the bloc's sovereignty and resilience.
Speaking to MPs this week, Dave Ramsden, deputy governor of the Bank of England, said his team was still working with HM Treasury on the design of a digital currency for the UK.
He told the House of Commons' Public Accounts Committee that the bank was trying to make sure it could provide the infrastructure and technology platform for the so-called digital pound, or central bank digital currency (CBDC), when plans are finalized.
"You've got to distinguish between money and the rails on which money operates," he said. "The bank wants to make sure that we have the best technological solution that ensures the singleness of money. CBDC is one option – retail CBDC – as a different type of money, but that's very distinct from the rails that money is operating on. We're still in the design phase with the Treasury. We've got to make a decision – I think this year – on our retail CBDC."
However, he said the bank was also looking at the potential role of stablecoins in the UK's digital currency market. Stablecoins are digital assets that are pegged to a specific currency.
"If a sterling stablecoin came along, as opposed to a digital pound, could we deal with that? Would that meet our standard of singleness of money, alongside commercial bank money or notes? That world has got more complicated even since we introduced the thinking on the digital pound. This is all very much in flux, and we are just trying to make sure that we are providing both the infrastructure and the technological platform that innovation can take place on."
In January, more than 60 economists lobbied the European Parliament to get behind plans for a digital euro. They said the EU must succeed in creating a digital currency if it is to avoid becoming dependent on the US, particularly in light of recent shifts in geopolitics.
"Europe's payment system is dominated by a handful of non-European corporations," they said [PDF]. "In 13 euro-area countries, basic retail payments now rely entirely on international card schemes – without any domestic alternative. This dependence on foreign (US) payment providers exposes European citizens, businesses, and governments to geopolitical leverage, foreign commercial interests, and systemic risks beyond Europe's control. Recent developments have made this more than a hypothetical risk. Without a meaningful digital euro, our dependence will deepen as US-backed private digital currencies are gaining ground. Europe will lose control over the most fundamental element in our economy: our money."
Ramsden told MPs that the European Central Bank (ECB) had "gone much further on retail CBDC – the digital euro – we're still at the design phase."
Assuming the EU adopts the necessary legislation, the ECB aims to be ready for a first issuance of the digital euro during 2029.
In November 2021, the Bank of England and HM Treasury announced a consultation process designed to inform a decision about whether the UK should proceed to design and create a CBDC, which at the time briefly earned the moniker Britcoin.
In January 2022, the House of Lords Economic Affairs Committee said it was yet to "hear a convincing case for why the UK needs a retail CBDC."
In February 2023, the Bank of England and HM Treasury said the UK would probably need a digital version of the pound at some point and launched their promised consultation.
"It is too early to commit to building the infrastructure for one, but we are convinced that further preparatory work is justified," the paper said.
In April 2025, the Bank of England showed that an offline digital payment system could work. However, it was waiting to study policy choices before progressing further. ®
Source: The register