The UK Bitcoin community reacts to the inbound circulation of CBDC and the digital pound

The UK government’s Department of the Economy and Finance, HM Treasury, is recruiting for a Head of Central Bank Digital Currency (CBDC) to lead the development of the digital pound. The work is described as “important, complex and cross-sectoral” and will “require broad engagement across and beyond HM Treasury”.

According to the Linkedin post, the Treasury and the Bank of England are working together through the CBDC Taskforce to explore the case for a digital pound. The role of the CBDC chief could bring the UK government closer to its goal of introducing CBDC.

HM Treasury job advert for Head of CBDC. Source: LinkedIn

Danny Scott, CEO of UK-based Bitcoin (BTC) company CoinCorner, told Cointelegraph that CBDC may lack “the actual real-world use and purpose – which we often see.”

“For those who have been in the industry for a cycle or two, we’ve seen hype come and go, altcoins, blockchain, distributed ledger, ICO, DeFi, NFT. You see big companies coming in and jumping on the latest hype to avoid looking like they’re behind, for most it falls into R&D and research, which is completely understandable.”

Scott, who has been working and building in the Bitcoin space for over a decade, explained that sometimes the public can misinterpret R&D projects in the crypto space and perhaps confuse them with useful real-world solutions.

“CBDC (digital lira) is not far from that, a lot of countries around the world are looking into that and trying to understand the benefits of that over the current system, frankly, it’s going to happen.”

Indeed, the move to a digital pound matches the trend among central banks around the world to explore the potential of CBDCs. In Europe, the European Central Bank (ECB) is actively exploring the future of the digital euro, and several countries, including Sweden and Denmark, are also exploring their own digital currencies.

CBDCs claim to offer a number of benefits, including improved financial inclusion, reduced costs for businesses and consumers, and increased security and efficiency in the payment system.

However, El Salvador has banked up to 70% of the unbanked population with the introduction of Bitcoin as legal tender, while countries such as Nigeria, Ghana and Kenya can now receive money from around the world on a mobile phone or Bitcoin exchange account.

Paying for coffee in El Salvador with Bitcoin. Source: Cointelegraph

In addition, there are potential risks of introducing a new digital currency. James Dewar, a partner at UK-based bitcoin trading solution Bridge2Bitcoin and a director at Laser Eyes Cards, told Cointelegraph that “Introducing CBDC in itself would present different challenges and risks than Bitcoin”, as CBDC requires “trust in third countries, central banks and governments not to abuse the supply of currency.’

“This risk applies at the macro level as it does today, but more worryingly with the CBDC regarding the ability of the government or its agencies to monitor and censor individual spending. This is a huge risk to the rights of freedom and property within our societies.

It raises the question: “While we may trust one government or another, do we as citizens trust all future governments, whatever their colour, with this power?” Tony Yates, a former senior adviser to the Bank of England, spoke out against CBDC. Echoing Dewar’s thoughts, he questioned the motivations behind the global rollout of CBDCs, calling them “suspicious.”

Dewar continued: “It is sensible for the government to investigate the idea properly. Overall, we are concerned that there may be political pressure on the process that ignores or significantly downplays the risks to society from CBDCs.”

The “digital” aspect of money has also been called into question. The UK is increasingly becoming a digital, cash-based society: less than 15% of payments are made with physical cash according to the Bank of England, and as many as 23 million people – about a third of the UK population – have not used cash in everything in 2021.

Cointelegraph reporter Joe Hall competes with contactless payments, bitcoin against pounds sterling in Gibraltar. Source: Cointelegraph

Scott asks the Treasury: “Don’t we already have a digital pound?”

“From an end-user perspective, the pound is mostly digital these days, regardless of the mechanism used. So, once they complete their exploratory stages, I would like to see a list of the benefits and new features that CBDC will bring to the public.”

In the meantime, Scott will “continue to focus on Bitcoin and creating a global interoperable system that everyone can participate in.”

Connected: Amid the crypto winter, central banks are rethinking their domestic digital currencies

Dewar said there may be hope for Bitcoin and the UK government: “the role description notes that the emergence of private sector money (such as Bitcoin) offers exciting opportunities for UK businesses and consumers and we would very much agree with this at Bridge2Bitcoin .” The Bank of England bank, by design, will be available to Britons, although no official timetable has been set.