BoE governor shoots down digital pound talks and ‘risky’ crypto investments

Bank of England (BoE) Governor Andrew Bailey is pumping the brakes on the digital pound while signaling serious doubt over whether the UK needs a central bank digital currency (CBDC) for everyday consumers.

Speaking at a conference in Kyiv, Bailey made it clear he’s not yet “convinced that we need to create new forms of money” to unlock the potential of smarter payments, fraud prevention, or even the much-hyped world of smart contracts.

This is one of the strongest indications yet that top UK officials are leaning away from rolling out a retail digital pound, at least for now.

BoE boss slows digital pound push

The UK is still in the design phase, far behind other countries that are pushing aggressively ahead with CBDC plans. Despite working alongside the Treasury, the BoE hasn’t made any final calls on whether the project will move forward for consumer use.

As per reports, Bailey said that the bank is making solid progress on wholesale central bank digital money, but he’s looked less enthusiastic about a version aimed at households.

“It seems like a failure of imagination if we think otherwise,” Bailey noted about exploring the benefits of digital money, but quickly added, “That said, I remain to be convinced that we need to create new forms of money, such as Central Bank Retail Digital Currency,  to achieve this.”

The UK’s hesitation stands in contrast to jurisdictions like China and the European Union, which are moving quickly on digital currencies for consumer use. The UK’s central bank and the government have been jointly exploring the potential rollout of a digital pound that could sit alongside cash and traditional bank deposits.

Bailey’s comments suggest that for the UK, a digital pound isn’t just about tech, it’s about whether the actual need exists in the first place.

Bailey insists crypto is still ‘risky’

The BoE also took the opportunity to sound the alarm on cryptocurrencies. He described Bitcoin and its peers as a “risky asset class” that people should approach with caution. His warning lands just as the UK’s financial regulator signals plans to lift its ban on certain crypto-linked investments. However, it would not be without reminding investors that they could still “lose all their money.”

The global digital assets market has seen a massive revival with Donald Trump winning the US presidential elections. Bitcoin, the biggest crypto, has surged by a huge 62% over the last year. BTC price went on to hit its fresh all-time high (ATH) of nearly $112K recently. However, the cumulative crypto market cap stands strong at around $3.3 trillion.

Beyond digital assets, Bailey raised broader concerns about the structure of today’s financial system. He questioned whether the wave of post-2008 financial regulations may have gone too far. That might have possibly pushed risk out of traditional banks and into less-regulated corners of the market.

He defended the tighter rules, stating that higher regulatory standards were essential in the wake of a crisis that left deep scars on the global economy.

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