Britain has not put the digital pound on the back burner just yet, but the introduction of a central bank digital currency (CBDC) isn't a foregone conclusion either, if Tuesday’s comments from Conservative minister Andrew Griffith are anything to go by.
The government is expected to launch a public consultation on CBDCs in the coming weeks, alongside a broader consultation on Britain's general regulatory approach to crypto assets.
"The consultation (on CBDCs) is going to say this is an if and not a when. We are not fully into the inevitability of doing this," Griffith told the UK parliament's Treasury Select Committee.
"We have got to get them right. I would rather be right than be first ... It will be a long lead-time activity,” he said, adding that settling wholesale financial transactions would be the first fundamental use case," he added.
Griffith’s conflicting comments on CBDCs contrast with those of other global contemporaries in Australia, Thailand, Brazil, India, South Korea and Russia, all of which have been bullish on the technology.
However, prime minister Rishi Sunak has been vocally supportive of digital currencies in the past, stating his wishes “to make Britain a global hub for crypto-asset technology and investment”.
But there is a risk of the public conflating CBDCs, which are government-issued, centralised currencies, with cryptocurrencies in the vein of bitcoin (BTC), which are decentralised and not meant to be governed by a centralised entity.
As the chief strategist Alex Gladstein of the Human Rights Foundation told Politico: “I would be very careful when a politician says they are ‘crypto-friendly'. This is usually code for wanting to control, censor, constrict and regulate use of bitcoin and cryptocurrency.”
Sunak reflected this point back in December 2021, stating enthusiastically: “Unlike most of the digital money people use daily today, (CBDCs) would be issued by a central bank like the Bank of England in the UK.”
The European Union is also readying a draft law this year concerning the regulation of a digital euro.