The Economic Affairs Committee has published its report on the potential for the UK to have a central bank digital currency. It has concluded that there’s no convincing case to have one. Although there could be some advantages, the challenges to financial stability and protection of privacy outweigh them. The report identified the two main concerns as:
- potential compromise of individual accounts through weaknesses in cyber security; and
- the possibility for the critical centralised CBDC ledger to be a target for hostile attacks.
However, the report says that the case for a digital pound may change in the future, so the best course of action now is to participate in shaping global standards which “suit the UK’s values and interests” in terms of the protections needed.