BoE Rethinks CBDC, Urges Banks to Step Up Payment Plan

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Bank of England Rethinks CBDC, Urges Banks to Step Up Payment Innovation

Written by Aaron S.,

Editor-In-Chief

Last Updated: July 23, 2025

Key Takeaways

The Bank of England is rethinking its central bank digital currency plan and urging banks to improve payment systems instead;
Governor Andrew Bailey said he would need strong reasons to support a CBDC if private banks can meet public needs;
Public and political backlash, including privacy concerns and crisis risks, has slowed progress on the digital pound.

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Bank of England Rethinks CBDC, Urges Banks to Step Up Payment Innovation

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The Bank of England (BoE) is reconsidering its plan to launch a central bank digital currency (CBDC), as questions grow over whether it would benefit the public or the financial system.

People familiar with the matter told Bloomberg on July 22 that the central bank is exploring other options and has been encouraging commercial banks to improve their own payment services instead of relying on a CBDC.

Governor Andrew Bailey shared his view during the Treasury Committee's parliamentary hearing on July 22 that he would need "a lot of convincing" to advance if private banks can meet customer needs through innovation.

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In 2023, Bailey stated that the BoE and the Treasury considered it "likely a digital pound will be needed in the future". However, public pushback and political criticism have cast doubt on the idea.

More than 50,000 people responded to a consultation on the project, most expressing concerns about privacy and the risk of harm to the banking system.

Several lawmakers have also raised objections. They warned a CBDC could make it easier for customers to withdraw funds quickly during crises. There have also been calls for stronger safeguards to protect personal data if the plan moves ahead.

The Atlantic Council, which monitors CBDC projects worldwide, still lists the UK’s plan as "in development", though it lags behind some other countries.

Recently, South Korea’s plans to expand testing of a CBDC have been put on hold. What happened? Read the full story.