Ex-Bank of England Economist Says Digital Pound is a ‘White Elephant,ʼ Costly and Useless
The Bank of England’s push for a digital pound has come under intense scrutiny, with critics arguing that the initiative is unnecessary, costly and lacks public demand.
According to a report from The Telegraph, former Bank of England economist Neil Record has labeled the project a “white elephant,” suggesting that it is driven more by the Bank’s financial interests than by consumer needs.
Despite having already spent £24 million on the project, the Bank has yet to provide a compelling justification for its necessity.
A Controversial Initiative with No Clear Demand
The Bank of England’s ambitious plan to introduce a central bank digital currency (CBDC), popularly dubbed the ‘digital pound’ or ‘Britcoin,’ has been severely scrutinized.
According to Neil Record, the initiative is expensive and unnecessary, lacks public demand, and could jeopardize the Bank’s financial model.
The digital pound was first proposed by the Bank of England and HM Treasury in 2021. It was envisioned as a new form of money that would complement, not replace, traditional cash and bank deposits.
— Cryptonews.com (@cryptonews) January 25, 2024
Britcoin: Is a Digital Pound Really on The Horizon?
Let's dive in
However, given the rapid decline in cash usage—from 51% of all payments in 2013 to just 12% in 2023—many question whether the project serves any real purpose.
Record argues that while digital transactions, such as contactless payments and mobile banking, have revolutionized the financial world, no one has clamored for a state-backed digital currency.
Instead, he believes the Bank of England is motivated by self-preservation, seeking to maintain relevance in an economy where cash is becoming obsolete.
Fight For Relevancy, Business Model, And Privacy Concerns
The Bank’s primary source of income is derived from interest foregone by holders of physical currency, and the dwindling use of cash threatens its economic model.
The project’s viability is further questioned because private banking solutions already offer digital payment services, including interest-bearing accounts and financial security for deposits under £85,000.
In contrast, the proposed digital pound offers no interest and appears redundant compared to existing banking infrastructure.
Moreover, concerns over privacy and government oversight add to the skepticism surrounding the initiative.
The idea that the Bank of England—widely seen as an extension of the government—would manage the digital pound raises fears of state surveillance over personal financial transactions.
With £24 million already spent on research and development, critics, including Lord Forsyth, have lambasted the initiative as a “solution in search of a problem.”
— Telegraph Money (@MoneyTelegraph) February 28, 2025
Andrew Bailey has blown £24m designing a digital pound that may never see the light of dayhttps://t.co/2oyR2pu5zv
The lack of consumer demand, unresolved privacy concerns, and uncertain benefits have led many to question whether the digital pound should proceed.
The financial burden of the digital pound initiative has grown significantly over the years.
Despite all these, the project remains in limbo. Ministers have yet to approve its launch due to unresolved concerns over consumer privacy and the necessity of such a currency.
Adding to the skepticism is Bank of England Governor Andrew Bailey’s recent admission that a digital pound is not a “must-have.”
Bailey suggested that while the Bank continues to explore the concept, the case for its necessity remains unproven.
A Project in Search of a Purpose?
The digital pound was initially touted as a more secure alternative to cryptocurrencies, offering the stability of being backed by the central bank.
However, as plans have dragged on with no definitive launch date, critics question whether the Bank of England is merely spending taxpayer resources on an initiative that lacks both urgency and practicality.
The concept of central bank digital currencies has gained traction worldwide. China is aggressively rolling out its digital yuan, and the European Central Bank is evaluating a digital euro.
Yet, unlike its counterparts, the UK isn’t ready to. According to Lord Forsyth’s remarks showing the baseless use of it:
“If they have spent £24m, then we have a problem. That’s a huge sum to spend for something that three years on they are not able to make the case for doing in the first place.”
For now, the digital pound remains in development with no clear path forward. While the Bank of England and HM Treasury continue their consultations, the skepticism surrounding the project suggests it may ultimately be abandoned.
The post Ex-Bank of England Economist Says Digital Pound is a ‘White Elephant,ʼ Costly and Useless appeared first on Cryptonews.
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Ex-Bank of England Economist Says Digital Pound is a ‘White Elephant,ʼ Costly and Useless
The Bank of England’s push for a digital pound has come under intense scrutiny, with critics arguing that the initiative is unnecessary, costly and lacks public demand.
According to a report from The Telegraph, former Bank of England economist Neil Record has labeled the project a “white elephant,” suggesting that it is driven more by the Bank’s financial interests than by consumer needs.
Despite having already spent £24 million on the project, the Bank has yet to provide a compelling justification for its necessity.
A Controversial Initiative with No Clear Demand
The Bank of England’s ambitious plan to introduce a central bank digital currency (CBDC), popularly dubbed the ‘digital pound’ or ‘Britcoin,’ has been severely scrutinized.
According to Neil Record, the initiative is expensive and unnecessary, lacks public demand, and could jeopardize the Bank’s financial model.
The digital pound was first proposed by the Bank of England and HM Treasury in 2021. It was envisioned as a new form of money that would complement, not replace, traditional cash and bank deposits.
— Cryptonews.com (@cryptonews) January 25, 2024
Let's dive in
However, given the rapid decline in cash usage—from 51% of all payments in 2013 to just 12% in 2023—many question whether the project serves any real purpose.
Record argues that while digital transactions, such as contactless payments and mobile banking, have revolutionized the financial world, no one has clamored for a state-backed digital currency.
Instead, he believes the Bank of England is motivated by self-preservation, seeking to maintain relevance in an economy where cash is becoming obsolete.
Fight For Relevancy, Business Model, And Privacy Concerns
The Bank’s primary source of income is derived from interest foregone by holders of physical currency, and the dwindling use of cash threatens its economic model.
The project’s viability is further questioned because private banking solutions already offer digital payment services, including interest-bearing accounts and financial security for deposits under £85,000.
In contrast, the proposed digital pound offers no interest and appears redundant compared to existing banking infrastructure.
Moreover, concerns over privacy and government oversight add to the skepticism surrounding the initiative.
The idea that the Bank of England—widely seen as an extension of the government—would manage the digital pound raises fears of state surveillance over personal financial transactions.
With £24 million already spent on research and development, critics, including Lord Forsyth, have lambasted the initiative as a “solution in search of a problem.”
— Telegraph Money (@MoneyTelegraph) February 28, 2025
The lack of consumer demand, unresolved privacy concerns, and uncertain benefits have led many to question whether the digital pound should proceed.
The financial burden of the digital pound initiative has grown significantly over the years.
Despite all these, the project remains in limbo. Ministers have yet to approve its launch due to unresolved concerns over consumer privacy and the necessity of such a currency.
Adding to the skepticism is Bank of England Governor Andrew Bailey’s recent admission that a digital pound is not a “must-have.”
Bailey suggested that while the Bank continues to explore the concept, the case for its necessity remains unproven.
A Project in Search of a Purpose?
The digital pound was initially touted as a more secure alternative to cryptocurrencies, offering the stability of being backed by the central bank.
However, as plans have dragged on with no definitive launch date, critics question whether the Bank of England is merely spending taxpayer resources on an initiative that lacks both urgency and practicality.
The concept of central bank digital currencies has gained traction worldwide. China is aggressively rolling out its digital yuan, and the European Central Bank is evaluating a digital euro.
Yet, unlike its counterparts, the UK isn’t ready to. According to Lord Forsyth’s remarks showing the baseless use of it:
“If they have spent £24m, then we have a problem. That’s a huge sum to spend for something that three years on they are not able to make the case for doing in the first place.”
For now, the digital pound remains in development with no clear path forward. While the Bank of England and HM Treasury continue their consultations, the skepticism surrounding the project suggests it may ultimately be abandoned.
The post Ex-Bank of England Economist Says Digital Pound is a ‘White Elephant,ʼ Costly and Useless appeared first on Cryptonews.
Read More
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