The Creeping Menace of Central Banks' Crypto Dreams

Should the state be in the payments business? It's a simple question but that is in essence what a central bank digital currency would amount to. A digital pound, dollar, euro or renminbi is not some token with illusory investment upside that is implied by monikers such as "Britcoin.” CBDCs are more akin to stolid stablecoins rather than currencies. Unfortunately, their potential to erode free enterprise is all too real. Controlling how, what and when money is transferred is not a place government bodies should be competing, with a massive advantage, against the rest of the monetary system.

The Bank of England recently released an 80-page consultation, followed by a speech on the digital pound by Deputy Governor Jon Cunliffe. The research has already cost tens of millions of pounds, which will mushroom, but there is undeniable logic in keeping in sync with changing technology. A decision on whether to proceed in earnest will be made by 2025, for expected completion by the end of the decade.