A former Bank of England economist has torn into the UK’s digital pound project, calling it a solution in search of a problem. Neil Record didn’t mince words when criticizing the central bank’s digital currency initiative, which has already gobbled up £24 million with precious little to show for it.
The Bank of England kicked off its CBDC project four years ago, hoping to modernize Britain’s financial system. But Record claims there’s “no customer demand” for a digital pound. None. Zero. He suggests the whole thing is more about keeping the central bank relevant than actually serving the public. Pretty damning stuff from someone who used to work there.
Meanwhile, the project limps along. Despite the hefty price tag, it’s apparently “no nearer” to launch than when it started. The Bank is eyeing a 2025 pilot, but given the lack of tangible progress, don’t hold your breath.
The public isn’t exactly clamoring for this innovation either. Privacy concerns abound. Nobody’s thrilled about the government potentially tracking every pound they spend. Shocking, right? Critics note this resistance is expected, as the risk of state surveillance remains the main objection to CBDCs according to the House of Lords Committee.
Cash usage has plummeted from 51% of transactions in 2013 to just 12% last year. COVID pushed everyone toward contactless payments. We’ve all adapted. We tap our cards and phones everywhere now. So why exactly do we need this new digital currency?
Technical challenges remain massive. Security, cyber risks, regulation — the list goes on. It’s a bureaucratic nightmare waiting to happen.
Not everyone agrees with Record’s gloomy assessment. Organizations like Big Brother Watch are encouraging public participation in government consultations about the digital pound to ensure citizens’ voices are heard. The Digital Pound Foundation argues a well-designed CBDC could boost innovation and showcase Britain’s fintech prowess. They think public-private collaboration could make this work.
But with existing digital payment options already meeting our needs, Record’s criticism stings: this expensive project might just be the Bank of England’s desperate attempt to stay relevant in a world that’s moving on without them. Four years and £24 million later, the digital pound remains more concept than reality.
