Digital pound CBDC consultation deadline extended

The Bank of England has extended its central bank digital currency (CBDC) consultation deadline. It was due to end on June 7 but has been pushed back to June 30 because of the omission of a question about non residents and the digital pound.

This appears to have been a technical glitch. The original consultation paper published in February outlined the list of topics to be polled, which includes the non resident question.

The question is, “Do you have comments on our proposal that non-UK residents should have access to the digital pound, on the same basis as UK residents?”

There’s been considerable discussion about the potential for cross border CBDC to reduce the cost of international payments. At the same time, some countries are concerned that foreign CBDCs might threaten their monetary sovereignty if their citizens choose to hold another country’s CBDC.

A fairly considerable proportion of UK citizens live abroad and might still have links and hence want to use digital currency for payments. Old statistics from around 2006 put the figure at 5.5 million, but that was before cheap flights were quite so ubiquitous. The UK government estimates the number living in the EU (apart from Ireland) at just under one million.

Many of these CBDC surveys aim to keep the questionnaire simple. The decision might come down to whether to allow non resident UK citizens to have access or to allow those who are neither resident nor a citizen to use the CBDC.

Meanwhile, in recent communications, the Bank of England gives the impression that a retail digital pound is likely in the future. Like the EU, the government is keen to avoid making the CBDC programmable at its core to prevent restrictions on its usage. However, this is unlikely to prevent the private sector from adding programmability at the application level.