UK Central Bank: Digital Pound Decision to be Finalized at Least Two Years Later; Taiwan CBDC Public Hearing Won by Financial Training Institute

The Bank of England (BoE) announced that the final decision on whether to launch the digital pound will not be made until at least two years later, delaying the original plan for this project. With the ongoing debate over privacy issues and competition in payment systems, the future of the digital pound is full of uncertainty.

On the other hand, Taiwan Central Bank's digital currency (CBDC) has further developed. The outsourcing project for the 'Central Bank Digital Currency (CBDC) Public Hearing, Explanation Meeting, and Forum' to be held on 1/14 has been awarded to the Taiwan Financial Institute.

Where did the concept of digital pound come from?

In 2021, the then Chancellor of the Exchequer, former Prime Minister Rishi Sunak, first proposed the concept of digital pound and viewed it as an important step in UK financial innovation. However, the UK Central Bank and the current government have shown a more cautious attitude towards the promotion of the digital pound. According to the statement of the UK Central Bank, the public's concerns about privacy are still a major obstacle.

Andrew Bailey, the Governor of the Central Bank of the United Kingdom, publicly expressed his reservations about issuing a Central Bank Digital Currency (CBDC) as early as October 2023. He believes that digital currency may only become necessary if the UK banking industry fails to improve the attractiveness of its payment system.

How is the design phase of digital pound progressing?

Although no final decision has been made, the Central Bank of the United Kingdom announced this week that it will collaborate with the UK Treasury to jointly research potential design options for digital pounds. This design phase will last for several years and will take into account the latest trends in global payment systems. According to the statement from the Central Bank of the United Kingdom: 'Over the next few years, we will complete the work of the design phase and assess the policy need for digital pounds based on changes in the wider payment environment, ultimately deciding whether to proceed with the project.'

In fact, as early as January 2024, the Central Bank of the UK had indicated that the relevant decisions regarding digital pounds would not be made before 2025, showing that the timetable for the plan is continuously being delayed.

Launching the laboratory soon to test the API

The Bank of England actively engages with stakeholders, including the CBDC Consultation Forum, the Technology Forum, and the Academic Advisory Group. These groups provide valuable insights into the technical, regulatory, and societal aspects of digital pound.

Looking ahead, the Bank of England plans to launch the 'Digital Pound Laboratory,' a sandbox environment for testing APIs, use cases, and business models.

Privacy issues have become the core concern of digital pounds.

The privacy protection of digital pounds has always been one of the public's most concerned topics. According to the UK government, digital pounds will protect users' privacy, but will not be completely anonymous like cash. Similar to current bank accounts or credit card payments, transactions of digital pounds may also be tracked to prevent illegal activities such as money laundering or terrorist financing. However, the UK Central Bank emphasizes: 'This legislation will protect users' privacy, ensuring that neither the Central Bank nor the government can access users' personal information, nor control how households and businesses use funds.'

Will the competition of payment systems become the key to promoting digital pound?

Currently, the UK financial industry is facing fierce competition from technology companies. Many tech firms have launched fast and convenient payment solutions, often with less regulatory restrictions. The Central Bank of England has said that digital pounds may be a necessary tool to maintain the competitiveness of the banking industry, but also emphasized that improving payment systems may delay the need for digital currencies.

The Taiwan CBDC public hearing was awarded to the Financial Research and Training Institute

Although the Central Bank of Taiwan believes that CBDC is not immediately necessary, it continues to research the issue. On 1/14, the outsourced service project "Holding public hearings, briefings, and forums on Central Bank digital currency (CBDC)" has been awarded to the Taiwan Academy of Banking and Finance. Taiwan is expected to have more discussions and applications for CBDC in public discussions.

(Central Bank Governor Yang Chin-lung: CBDC is not an international competition, analyzing three scenarios for the application of digital NT, with no expected issuance)

This article UK Central Bank: Digital Pound decision will not be finalized for at least two years; Taiwan CBDC public hearing won by Financial Research and Training Institute first appeared in Chain News ABMedia.