The UK intends to set a £20,000 "Bitcoin" limit for anyone who hold digital pounds.Table of Contents
The UK intends to set a £20,000 "Bitcoin" limit for anyone who hold digital pounds.
By CoinUnited
8 Feb 2023
A representative from the Bank of England has stated that whenever a digital currency is established in the UK, it is likely that citizens will be required to keep no more than £10k to £20k ($12,017 to $24,033) in their possession at any given time.
Both the Bank of England and the Treasury have ramped up their efforts to figure out how to issue digital pounds before the end of the decade. To prevent money from leaving traditional bank accounts, the government will put a cap on how much of the currency people may hold.
A consultation on the potential implementation of a central bank digital currency (CBDC), often known as "Britcoin," in the United Kingdom is ongoing till June. In order to facilitate transactions on online and mobile platforms, Deputy Governor of the Bank of England Jon Cunliffe said that a digital version of the pound will be required in the near future.
In a lecture given in London on Tuesday, Cunliffe suggested a maximum of £10,000, saying that 75% of workers would be able to get their salary in digital pounds at that level, and that £20,000 would make it possible for practically everyone to receive their income in digital pounds.
A CBDC would be backed by the government in a manner akin to actual cash, despite the fact that it is based on cryptocurrencies like Bitcoin. The Bank of England (BOE) aspires to create a stable, cash-like product that cannot be used for speculation or to accrue interest.
As paper currency declines in use and more people interact online, the central bank hopes to provide a cash-like product that will function more seamlessly. According to Cunliffe, the percentage of people who pay with cash has dropped from 60% to 15% in only the past 15 years.
The only government-backed money is now cash. Money spent on credit cards and accounts kept at commercial banks are essentially private transactions between a person and a business that are not guaranteed by the government's full faith and credit.
The goal of CBDC is to fill the hole created by the decline in the use of traditional currencies like paper money and coins. Without some kind of public money in circulation, especially in times of crisis, Cunliffe said, faith in money runs the danger of breaking down.
Cunliffe remarked in answer to queries after his address to the trade organization UK Finance, "it's likely no accident that usage of cash went down in the epidemic but the holdings of cash went up." "There are times when individuals want to know that their money is moored or might be anchored in cash, which is the safest kind of monetary anchorage. In order to allay fears that consumers may withdraw excessive amounts of money from traditional financial institutions in order to purchase CBDC, a cap on how much of the digital currency they can hold is in place.
According to Cunliffe, the BOE hasn't decided whether or not a CBDC would be built on distributed ledger technology, or DLT, like the blockchain technology that powers many cryptocurrencies.
Information is kept and checked by a network of computers rather than just one since DLT is a decentralized database. Based on present developments, "our opinion is that it is likely that a retail, general purpose digital central bank currency - a digital pound - will be needed in the UK," Cunliffe said. He mentioned how cash is becoming less common and how the digitization of money is progressing, mentioning how "major tech" companies would want to launch their own digital coinage.
Cunliffe warned that "public" money, that is, money issued by the state for universal use, the safest kind of currency, would lose value over time.
In order to access Bank of England money, a digital pound would provide the same "anchor function" as cash.
Cunliffe noted that while the digital pound being discussed at the moment might not be suited for wholesale markets, the bank is looking into solutions for the "tokenization" of central bank money for use in financial transactions.
A consultation on the potential implementation of a central bank digital currency (CBDC), often known as "Britcoin," in the United Kingdom is ongoing till June. In order to facilitate transactions on online and mobile platforms, Deputy Governor of the Bank of England Jon Cunliffe said that a digital version of the pound will be required in the near future.
In a lecture given in London on Tuesday, Cunliffe suggested a maximum of £10,000, saying that 75% of workers would be able to get their salary in digital pounds at that level, and that £20,000 would make it possible for practically everyone to receive their income in digital pounds.
A CBDC would be backed by the government in a manner akin to actual cash, despite the fact that it is based on cryptocurrencies like Bitcoin. The Bank of England (BOE) aspires to create a stable, cash-like product that cannot be used for speculation or to accrue interest.
As paper currency declines in use and more people interact online, the central bank hopes to provide a cash-like product that will function more seamlessly. According to Cunliffe, the percentage of people who pay with cash has dropped from 60% to 15% in only the past 15 years.
The only government-backed money is now cash. Money spent on credit cards and accounts kept at commercial banks are essentially private transactions between a person and a business that are not guaranteed by the government's full faith and credit.
The goal of CBDC is to fill the hole created by the decline in the use of traditional currencies like paper money and coins. Without some kind of public money in circulation, especially in times of crisis, Cunliffe said, faith in money runs the danger of breaking down.
Cunliffe remarked in answer to queries after his address to the trade organization UK Finance, "it's likely no accident that usage of cash went down in the epidemic but the holdings of cash went up." "There are times when individuals want to know that their money is moored or might be anchored in cash, which is the safest kind of monetary anchorage. In order to allay fears that consumers may withdraw excessive amounts of money from traditional financial institutions in order to purchase CBDC, a cap on how much of the digital currency they can hold is in place.
According to Cunliffe, the BOE hasn't decided whether or not a CBDC would be built on distributed ledger technology, or DLT, like the blockchain technology that powers many cryptocurrencies.
Information is kept and checked by a network of computers rather than just one since DLT is a decentralized database.
Based on present developments, "our opinion is that it is likely that a retail, general purpose digital central bank currency - a digital pound - will be needed in the UK," Cunliffe said.
He mentioned how cash is becoming less common and how the digitization of money is progressing, mentioning how "major tech" companies would want to launch their own digital coinage.
Cunliffe warned that "public" money, that is, money issued by the state for universal use, the safest kind of currency, would lose value over time.
In order to access Bank of England money, a digital pound would provide the same "anchor function" as cash.
By serving as a "bridging asset" between various platforms, prevent specific tech companies from monopolizing certain segments of the online market with their own coinage.
Make money "programmable" so that it may interact with so-called smart contracts and perform certain tasks when certain criteria are met.
Cunliffe noted that while the digital pound being discussed at the moment might not be suited for wholesale markets, the bank is looking into solutions for the "tokenization" of central bank money for use in financial transactions.
Both the Bank of England and the Treasury have ramped up their efforts to figure out how to issue digital pounds before the end of the decade. To prevent money from leaving traditional bank accounts, the government will put a cap on how much of the currency people may hold.
A consultation on the potential implementation of a central bank digital currency (CBDC), often known as "Britcoin," in the United Kingdom is ongoing till June. In order to facilitate transactions on online and mobile platforms, Deputy Governor of the Bank of England Jon Cunliffe said that a digital version of the pound will be required in the near future.
In a lecture given in London on Tuesday, Cunliffe suggested a maximum of £10,000, saying that 75% of workers would be able to get their salary in digital pounds at that level, and that £20,000 would make it possible for practically everyone to receive their income in digital pounds.
A CBDC would be backed by the government in a manner akin to actual cash, despite the fact that it is based on cryptocurrencies like Bitcoin. The Bank of England (BOE) aspires to create a stable, cash-like product that cannot be used for speculation or to accrue interest.
As paper currency declines in use and more people interact online, the central bank hopes to provide a cash-like product that will function more seamlessly. According to Cunliffe, the percentage of people who pay with cash has dropped from 60% to 15% in only the past 15 years.
The only government-backed money is now cash. Money spent on credit cards and accounts kept at commercial banks are essentially private transactions between a person and a business that are not guaranteed by the government's full faith and credit.
The goal of CBDC is to fill the hole created by the decline in the use of traditional currencies like paper money and coins. Without some kind of public money in circulation, especially in times of crisis, Cunliffe said, faith in money runs the danger of breaking down.
Cunliffe remarked in answer to queries after his address to the trade organization UK Finance, "it's likely no accident that usage of cash went down in the epidemic but the holdings of cash went up." "There are times when individuals want to know that their money is moored or might be anchored in cash, which is the safest kind of monetary anchorage. In order to allay fears that consumers may withdraw excessive amounts of money from traditional financial institutions in order to purchase CBDC, a cap on how much of the digital currency they can hold is in place.
According to Cunliffe, the BOE hasn't decided whether or not a CBDC would be built on distributed ledger technology, or DLT, like the blockchain technology that powers many cryptocurrencies.
Information is kept and checked by a network of computers rather than just one since DLT is a decentralized database. Based on present developments, "our opinion is that it is likely that a retail, general purpose digital central bank currency - a digital pound - will be needed in the UK," Cunliffe said. He mentioned how cash is becoming less common and how the digitization of money is progressing, mentioning how "major tech" companies would want to launch their own digital coinage.
Cunliffe warned that "public" money, that is, money issued by the state for universal use, the safest kind of currency, would lose value over time.
In order to access Bank of England money, a digital pound would provide the same "anchor function" as cash.
Cunliffe noted that while the digital pound being discussed at the moment might not be suited for wholesale markets, the bank is looking into solutions for the "tokenization" of central bank money for use in financial transactions.
A consultation on the potential implementation of a central bank digital currency (CBDC), often known as "Britcoin," in the United Kingdom is ongoing till June. In order to facilitate transactions on online and mobile platforms, Deputy Governor of the Bank of England Jon Cunliffe said that a digital version of the pound will be required in the near future.
In a lecture given in London on Tuesday, Cunliffe suggested a maximum of £10,000, saying that 75% of workers would be able to get their salary in digital pounds at that level, and that £20,000 would make it possible for practically everyone to receive their income in digital pounds.
A CBDC would be backed by the government in a manner akin to actual cash, despite the fact that it is based on cryptocurrencies like Bitcoin. The Bank of England (BOE) aspires to create a stable, cash-like product that cannot be used for speculation or to accrue interest.
As paper currency declines in use and more people interact online, the central bank hopes to provide a cash-like product that will function more seamlessly. According to Cunliffe, the percentage of people who pay with cash has dropped from 60% to 15% in only the past 15 years.
The only government-backed money is now cash. Money spent on credit cards and accounts kept at commercial banks are essentially private transactions between a person and a business that are not guaranteed by the government's full faith and credit.
The goal of CBDC is to fill the hole created by the decline in the use of traditional currencies like paper money and coins. Without some kind of public money in circulation, especially in times of crisis, Cunliffe said, faith in money runs the danger of breaking down.
Cunliffe remarked in answer to queries after his address to the trade organization UK Finance, "it's likely no accident that usage of cash went down in the epidemic but the holdings of cash went up." "There are times when individuals want to know that their money is moored or might be anchored in cash, which is the safest kind of monetary anchorage. In order to allay fears that consumers may withdraw excessive amounts of money from traditional financial institutions in order to purchase CBDC, a cap on how much of the digital currency they can hold is in place.
According to Cunliffe, the BOE hasn't decided whether or not a CBDC would be built on distributed ledger technology, or DLT, like the blockchain technology that powers many cryptocurrencies.
Information is kept and checked by a network of computers rather than just one since DLT is a decentralized database.
Based on present developments, "our opinion is that it is likely that a retail, general purpose digital central bank currency - a digital pound - will be needed in the UK," Cunliffe said.
He mentioned how cash is becoming less common and how the digitization of money is progressing, mentioning how "major tech" companies would want to launch their own digital coinage.
Cunliffe warned that "public" money, that is, money issued by the state for universal use, the safest kind of currency, would lose value over time.
In order to access Bank of England money, a digital pound would provide the same "anchor function" as cash.
By serving as a "bridging asset" between various platforms, prevent specific tech companies from monopolizing certain segments of the online market with their own coinage.
Make money "programmable" so that it may interact with so-called smart contracts and perform certain tasks when certain criteria are met.
Cunliffe noted that while the digital pound being discussed at the moment might not be suited for wholesale markets, the bank is looking into solutions for the "tokenization" of central bank money for use in financial transactions.
