BoE Reassesses Digital Pound as Global CBDC Hype Fades and Private Innovation Grows

The Bank of England (BoE) is reportedly reevaluating its ambitious central bank digital currency (CBDC) plans, with internal discussions suggesting a potential shift away from prioritizing a digital pound. The move aligns with growing confidence in private-sector payment solutions and a global trend of waning enthusiasm for CBDCs. Senior officials have indicated that perceived benefits of a digital pound are diminishing, prompting a strategic reassessment of the project’s necessity [1][2]. While no formal decision has been made, the BoE’s focus has shifted toward monitoring private-sector innovations, particularly tokenized deposits from commercial banks, as a viable alternative [3].

Governor Andrew Bailey, a vocal skeptic of CBDCs, has questioned the need for a digital pound if existing banking technologies can address emerging challenges. In a recent Treasury Committee statement, he remarked that “if commercial bank innovations succeed, I question why we need to introduce a new form of money” [2]. This marks a stark contrast to his earlier stance in 2023, when he described a digital pound as “likely necessary.” The BoE’s Financial Services Growth and Competitiveness Strategy now emphasizes innovation rather than currency issuance, reflecting a broader pivot toward supporting private-sector advancements [1].

Public and political resistance has further weakened momentum for the project. Over 50,000 responses to a BoE consultation highlighted concerns about privacy, surveillance risks, and unintended consequences such as bank runs during crises. Critics also warned of enabling tech monopolies or undermining traditional financial systems. The backlash mirrors global skepticism, with countries like South Korea pausing CBDC plans and the U.S. passing legislation limiting federal experimentation. The Atlantic Council’s CBDC tracker notes that only three nations have launched CBDCs, while many others are scaling back efforts [1][2].

The BoE’s “wait-and-see” approach underscores a broader recognition that private-sector solutions may offer faster, more cost-effective alternatives to a state-backed digital currency. Officials argue that commercial banks and fintech firms are already addressing key issues such as cross-border payments and financial inclusion, reducing the urgency for a central bank to intervene [3]. However, analysts caution that delaying the project could limit the UK’s influence in shaping global digital currency standards, potentially ceding ground to nations with more aggressive CBDC roadmaps [4].

Technical and operational hurdles remain unresolved. Implementing a digital pound would require robust infrastructure to avoid destabilizing existing systems, a challenge compounded by shifting public sentiment. The BoE has not ruled out a future CBDC but insists any initiative must align with evolving economic needs rather than speculative goals [5].

This development highlights the fragility of CBDC ambitions worldwide. As central banks balance innovation with practicality, the BoE’s approach may serve as a cautionary example for other nations. The digital pound remains in the design phase, with no immediate plans for launch, but the central bank’s flexibility leaves room for a reversal if conditions change.

Sources:

[1] [Bank of England Considers Shelving Plans for a Digital Pound](https://www.bloomberg.com/news/articles/2025-07-22/bank-of-england-considers-shelving-plans-for-a-digital-pound)

[2] [Bank of England Rethinks Digital Pound as Global CBDC Hype Fades](https://www.ccn.com/news/crypto/bank-of-england-digital-pound-global-cbdc-hype-fades/)

[3] [Bank of England considers shelving plans for a digital pound](https://m.economictimes.com/news/international/world-news/bank-of-england-considers-shelving-plans-for-a-digital-pound/articleshow/122843970.cms)

[4] [Bank of England mulls canning CBDC plan: Report](https://www.binance.com/en/square/post/27320233360098)

[5] [BOE Mulling Shelving Digital Pound Plan: Wire](https://www.aastocks.com/en/stocks/news/aafn-con/NOW.1455137/top-news/AAFN)