UK to outline steps for government-controlled digital currency by the end of the year.
The UK Government are poised to release their plans for a government-controlled central bank digital currency (CBDC) within weeks.
The report will be issued by the Bank of England, a UK government-owned central bank, and the UK Treasury, the government branch that develops and implements financial and economic policy.
The release of the report was announced by Sir Jon Cunliffe, the Bank of England’s Deputy Governor of Financial Stability, during a recent speech titled “Reflections on DeFi, digital currencies and regulation.”
The speech was light on specifics but indicated that the Bank of England and other UK government entities plan to impose more restrictions on cryptocurrencies as they move forward with their work on a government-controlled digital pound.
During the speech, Cunliffe noted that the Bank of England is “actively exploring the issuance of a digitally native Pound sterling” and cited the recent collapse of the cryptocurrency exchange FTX as one of his justifications for the introduction of stricter cryptocurrency rules.
Cunliffe said that the Bank of England and Treasury’s work on a digital pound was being driven by “the trends away from physical cash, which cannot be used in an increasingly digital economy, and, potentially, towards new forms of tokenised money.”
Cunliffe didn’t discuss any potential privacy implications or limits that would apply to a potential digital pound but said there will be a “framework in which risks are properly managed.” He also pointed to the fall of FTX as “a compelling demonstration of why that matters.”
In addition to discussing the digital pound, Cunliffe also talked about how cryptocurrencies will soon be subject to harsher regulations in the UK. He said that “the financial service activities and the entities that now populate the crypto world” should be brought “within the regulatory framework” and cited “the need to protect consumers” and “the need to protect financial stability” to justify his push for stricter cryptocurrency regulations.
Cunliffe also suggested that he wants to create regulated versions of some of the technologies from the decentralized finance (DeFi) space, such as “smart contracts.”
In DeFi, these smart contracts let people quickly access various financial services without having to go through a centralized intermediary. But Cunliffe said the Bank of England, Treasury, and the UK’s financial regulator, the Financial Conduct Authority (FCA), are working on a “regulatory ‘sand box’” where developers can explore “whether and how” the risks Cunliffe associates with DeFi “can be managed to the level of assurance we expect from the current system.”
The digital currency forms an essential part of a Social Credit System. A programmable currency gives the Government control over the people like never before. A threat to freedom itself.