While there are a “number of potential benefits” associated with central bank digital currencies (CBDCs), the UK government “should carefully consider and seek to mitigate any potential risks” associated with the development and potential introduction of the so-called digital pound.”
This is particularly relevant “in relation to financial stability, privacy, and security risks,” the British Crypto and Digital Assets All Party Parliamentary Group (APPG) said in a report Monday.
APPGs are independent, cross-party groups within the UK Parliament that are formed by Members of Parliament (MPs) and Members of the House of Lords to provide insights and recommendations to policymakers.
The report also urged the government to “be careful to ensure that the introduction of any future digital pound does not stifle private sector innovation.”
The 52-page report, entitled “Realising Government’s Vision for the UK To Become a Global Hub for Cryptocurrency & Fintech Innovation,” shares the Crypto and Digital Assets APPG’s findings of the inquiry it launched last year into the state of the digital assets industry in the UK.
Led by Dr. Lisa Cameron MP, the Crypto and Digital Assets APPG focuses on discussing and examining issues related to cryptocurrencies and digital assets. As part of the inquiry, the Crypto APPG gathered input from various stakeholders within the industry, such as operators, regulators, experts, and the general public, to gauge their perspectives on the necessity of regulating the sector.
Additionally, the group conducted a series of public evidence sessions in Parliament, where experts provided insights on the crucial factors that must be taken into account for the government to realize its vision for the sector.