At the Financial Times’ Crypto and Digital Assets Summit in London, the Bank of England’s director of FinTech, Tom Mutton, recently discussed the UK’s ambitions to implement a Central Bank Digital Currency (CBDC) – Digital Pound.
As per the report, the Bank of England’s head of fintech addressed fears that a digital pound would jeopardize privacy while also confirming that it would not be exchangeable with cryptocurrencies, at least as they presently exist. Mutton said,
“There’s no incentive and no reason for us to offer a digital pound unless it has the very highest standards of privacy.”
Digital Pound will not be anonymous
According to Mutton, the U.K.’s aspirations for a digital pound will only succeed if “it has the very highest standards of privacy,” but he said that anonymity was never intended for such a product.
Tom Mutton, who oversees the bank’s CBDC division, claimed that anonymity and privacy are frequently used interchangeably when they shouldn’t be.
In contrasting the two ideas, he emphasized the point that privacy denotes that individuals have some sort of oversight over their data, whereas anonymity implies that there are no bits of data on a readily available individual. Meanwhile, Mutton stated that the digital pound would not jeopardize privacy and would make it a top priority, as the Bank of England is dedicated to protecting users’ data.
The digital pound, according to Mutton, would not be anonymous, but the bank was open to suggestions for “some level of shielding” for low-level transactions.
From his statements, however, it can be suggested that the BOE Fintech believes that anonymity is not an absolute right and must be balanced against other important considerations such as preventing money laundering and terrorism financing.
Digital Pound’s not compatible with crypto
Furthermore, Mutton acknowledged that cryptocurrency might be used to make anonymous payments, but he contended that anonymity was a public policy issue that shouldn’t be permitted.
He said that since cryptocurrencies do not “fulfill any of the functions of money,” a digital pound would not be compatible with them as they now stand. Meanwhile, Tom Mutton stated that “a well-regulated payment stablecoin would absolutely be part of their interoperability objectives” if these two classes of digital currencies emerge in the future.
