Bank of England Turns to Private Sector Solutions Amid Rising Concerns Over CBDC

The Bank of England is under mounting pressure from the Reform Party to expedite its work on a digital pound, despite the central bank’s growing doubts about whether a central bank digital currency (CBDC) is truly needed for individuals. The Reform Party, which strongly promotes technological advancement in financial systems, has taken issue with the Bank’s measured pace and claims a digital pound would boost the UK’s competitiveness in international payments and foster greater financial inclusion The Digital Commonwealth, [ 1 ]. Nevertheless, Bank of England Governor Andrew Bailey has openly expressed reservations about introducing “new types of money,” arguing that improvements to existing payment platforms may be sufficient Brave New Coin, [ 2 ].

This cautious stance reflects a worldwide trend, as several countries pull back from developing CBDCs. Nations including Canada, Australia, and Nigeria have either dropped or suspended their retail digital currency projects due to weak public uptake and resistance. Meanwhile, the United States, under President Trump, issued an executive order in January 2025 that halted CBDC development over concerns about privacy, financial security, and threats to national sovereignty Brave New Coin, [ 2 ]. In the UK, the Bank of England is now prioritizing support for private-sector innovation, urging companies to create payment systems that could deliver the benefits of a digital pound without direct state involvement Brave New Coin, [ 2 ].

Public opinion has been a key factor in the fading momentum for the digital pound. Polls reveal that most people in the UK are against a state-issued digital currency, with privacy and surveillance the main reasons for their opposition. Many critics worry that a digital pound could allow authorities to track individuals’ spending or restrict transactions. The Bank of England has stressed that any digital pound would

replace physical cash and would instead be distributed by private wallet providers. However, these assurances have not fully dispelled public concerns Brave New Coin, [ 2 ].

Ongoing discussions within the Bank highlight the lack of a clear economic justification for a digital pound. Although some officials previously suggested a CBDC could solve gaps in payment services, newer studies indicate that private options—like stablecoins and digital bank accounts—already address many of these needs. For example, stablecoins such as

and EURC are increasingly used for on-chain payments, providing quick, inexpensive transactions without the price swings seen in cryptocurrencies. The Bank has recognized that commercial solutions will need thorough assessment before any decision on a digital pound is made.

Although there is no official cancellation, the Bank of England still has plans for a “Digital Pound Lab” to be launched in 2025, aiming to experiment with use cases and collect feedback from both the public and businesses. Nonetheless, the project’s future depends on political and public backing, and would require new privacy laws and parliamentary consent before launch. The earliest the digital pound could realistically appear is in the latter part of the decade, if the initiative moves forward Brave New Coin, [ 2 ].

The ongoing debate about the digital pound reflects deeper disagreements between advocates of government-led monetary reform and those favoring private sector-led innovation. Supporters believe a CBDC could make the UK’s financial system more robust, while critics warn of the dangers of excessive centralization and government control. As global interest in CBDCs wanes, the Bank of England’s decisions will be pivotal in shaping the future of digital currencies in Britain and potentially elsewhere.