Fireblocks Director of CBDC & Market Infrastructure Varul Paul has commented on the recent Bank of England Consultation paper focused on the development of the Digital Pound.
Prior to Fireblocks, Varun spent 14 years “at the Bank of England, where he supported key decisions on interest rates, managed risks to financial stability, and delivered a landmark review on the future of finance.”
Given his experience, here’s what Varun has to say regarding the recent Bank of England Consultation Paper:
“I applaud the Bank of England and HM Treasury for publishing such a detailed and thoughtful paper, and for taking the decision to proceed with the design phase of a digital pound. The consultation paper is a great opportunity for the digital asset industry to engage with the Bank of England and HM Treasury, to either confirm or challenge the design choices they have presented.”
The Bank sees it “as its public duty to provide continued access to central bank money in a digital world.” At the heart of the paper is a desire “to preserve the ‘uniformity’ of money in an environment where cash use is declining rapidly.”
As we migrate from cash to alternatives, “including cards, bank payments, and mobile payments, we are becoming increasingly reliant on the private sector.”
Varun further noted:
“And as we move to new forms of payment, including through stablecoins, there is a risk of fragmentation and frictions or costs in converting between them. A digital representation of central bank money would help to ensure that £10 is worth £10 always and everywhere and can always be converted freely, just as it is today.”
He added:
“I’m pleased to see the commitment to ensuring privacy – neither the Bank of England nor the Government will be able to access personal transaction data. But wallet providers – banks and non-banks – will be responsible for onboarding, and monitoring for compliance with AML/KYC regulations, just as the case today for bank and card payments. The UK model will be privacy by design, but not anonymity. The plan is for this to work alongside the stablecoins of the future, rather than supplant them.”