The UK will continue to use cash, and digital currency will not replace it, according to Bank of England (BOE) Governor Andrew Bailey.
Speaking at the Group of Thirty’s Annual International Banking Seminar in Washington, Bailey affirmed that the BOE will supply notes and coins “for as long as people want” them, noting that public demand for cash remains strong.
Bailey’s remarks come amid concerns that central bank digital currencies (CBDCs) could make cash obsolete. Privacy advocates warn that CBDCs could remove transaction privacy, enable government surveillance, and potentially exclude individuals from the financial system.
Although the BOE has started working on a digital version of the pound, called “Britcoin,” no final decision has been made on its release. Bailey indicated that while the BOE remains cautious about launching a retail CBDC for everyday consumers, he supports a wholesale CBDC for use by banks.
Bailey suggested that retail CBDCs might not fulfill an “anchor role” in the same way cash does but acknowledged a strong case for using central bank money in high-value payments and in settling payment systems.
The BOE’s development of a retail CBDC is primarily intended to encourage private sector innovation and modernization within commercial banking and to enhance the UK’s digital payments infrastructure.
Bailey also emphasised the importance of advancing cross-border payments, where progress has been slow.
He pointed out that banks have limited incentives to expedite cross-border payment systems, which he sees as hindering innovation.
