Digital pound warning in the UK

Committee members expressed reservations about the possible introduction of the individual digital pound. Warnings were made about careful scrutiny before implementation. The Committee recognised the potential advantages of the digital pound in terms of innovation, but noted that costs and risks should be considered. It called for a comprehensive assessment by the Treasury and the central bank.

The committee's report suggested lower initial limits on the value of digital pounds. Thus, it was stated that the risk of potential bank transactions in possible market instability would be mitigated. It was stated that the measure could prevent deposit transfers that could increase the risk of bank failures and increase credit costs.

Concerns about privacy were addressed in the report. It was recommended to limit the use of data in digital pound legislation. Committee Chair Harriett Baldwin emphasised that convincing evidence is needed before considering the introduction of the individual digital pound.

Baldwin reminded that there should be clear arguments that the digital pound will benefit the economy without increasing risks or causing unmanageable costs.

Baldwin reminded that there should be clear arguments that the digital pound will benefit the economy without increasing risks or causing unmanageable costs.