Thank you for contacting me about the ‘Digital Pound’ and Central Bank Digital Currencies (CBDC).

The way we interact with money is undergoing a transformation, both in the UK and globally. As cash becomes less prevalent in our daily transactions, new technologies are paving the way for the emergence of digital money. One significant development on the horizon is the concept of Central Bank Digital Currencies (CBDCs).

As banknotes issued by the Bank of England are used less frequently, it is crucial to consider new forms of digital money and the devices through which we make payments. As a global leader in finance, the UK recognises the potential impact of international developments on its domestic financial landscape.

To delve into the advantages and risks associated with CBDCs, the Government and the Bank of England have collaborated through the Central Bank Digital Currency Taskforce. These efforts have suggested that a digital pound may be necessary in the future. While it is early to commit to building the infrastructure for a CBDC, further preparation and investigation is certainly needed.

A digital pound would introduce a new form of digital money designed to meet the everyday payment needs of households and businesses. Rather than replacing cash, it would exist alongside traditional banknotes and coins. This digital counterpart would require a stringent set of standards around privacy and data protection, in order to maintain the public's trust in money while allowing the evolution of individual and business requirements.

It is crucial to distinguish CBDCs from cryptocurrencies and stablecoins. Unlike these private sector initiatives, a digital pound would be a central bank digital currency issued by the Bank of England. This distinction ensures that the digital pound maintains the stability and reliability associated with sterling currency.

In order to gather valuable insights and perspectives, the Government and the Bank of England launched a consultation to seek feedback on CBDCs. This consultation will help inform the decision on whether to proceed with the development and launch of a digital pound. While the consultation period has concluded, HM Treasury is considering the responses received.

Recognising the continued importance of cash in the lives of millions of people, the Government is committed to safeguarding access to cash through legislative measures. The Financial Services and Markets Bill will ensure the availability of cash withdrawal and deposit facilities across the UK.

Schemes such as Community Access to Cash have been very successful, as has the facilitation of the wide-spread adoption of cashback without a purchase brought about by the Financial Services Act 2021. There is, however, much more to be done, and this new legislation is vital to ensure the needs of cash users are understood and continue to be met by industry, including large and small retailers.

I recognise that it is crucial to strike a balance between embracing new technologies and preserving the accessibility and trust associated with traditional forms of money. The ongoing engagement with the public in shaping this future is vital. By exploring the concept of a digital pound, the UK Government aims to ensure that money and payment systems meet the evolving needs of individuals and businesses while maintaining the highest standards of privacy and data protection.

Thank you for all those who contacted me and took the time to voice thoughts and concerns.