BoE Signals Step Back from CBDC Rollout
The Bank of England (BoE) is scaling down its ambition to launch a digital pound, citing improved private-sector payment systems that already meet most consumer demands. Once a vocal proponent of a central bank digital currency (CBDC), the BoE now says it prefers banks to upgrade their own digital services rather than rely on a government-issued coin.
Internal research echoed that sentiment, showing the benefits of a CBDC have diminished over time.
As a result, the digital pound project—currently in its design phase—is unlikely to move forward. While no official decision has been made yet, signs point to a quiet retreat from full-scale implementation.
Leadership Pulls Back as Focus Shifts to Private Solutions
A major indicator of the pivot is the withdrawal of senior officials from direct oversight. Both Deputy Governor Sarah Breeden and Treasury’s Gwyneth Nurse, once central figures in shaping the CBDC vision, are no longer leading the charge. Recent meetings of the CBDC Engagement Forum have been handled by lower-level staff, signaling a drop in priority at the top levels.
Instead of pushing ahead with a digital pound, the BoE is urging UK banks to lead payment innovation, potentially through tokenized deposits or enhanced digital banking features. Officials believe that the private sector can deliver modern alternatives to a state-backed digital currency with less risk.
Public and Global Pushback Fuel UK’s Conservative Approach
The UK isn’t alone in retreating. Globally, central banks are stepping back from CBDCs as private solutions evolve rapidly. The Trump administration halted its digital dollar plans earlier this year, and South Korea’s central bank ended its CBDC trial due to limited upside and substantial risk.
At home, public feedback has also been cool at best—and hostile at worst. The BoE received over 50,000 public responses, many expressing privacy fears about government tracking of spending through a digital pound. Conspiracy theories and misinformation spread quickly, further damaging trust in the idea.
BoE officials now admit the digital pound may create more harm than good unless carefully managed. A worst-case scenario could see mass withdrawals from commercial banks during a crisis, if people rush into a government-backed digital wallet.
Stablecoins Could Force a Reversal
Despite its current stance, the BoE isn’t closing the door entirely. Officials admit they may be forced to revive the digital pound if a tech giant launches a widely adopted stablecoin that threatens the UK’s monetary sovereignty.
BoE Governor Bailey emphasized the need to retain control of the financial system, even if that means stepping back in to ensure stability.
For now, the message is clear: the UK prefers to let the private sector lead, at least until the risks of not having a CBDC outweigh the costs of building one.
