UK Finance proposes limiting digital pound ownership to £5,000

United Kingdom
United Kingdom

UK Finance, the trade association for the UK banking and financial services sector, believes that banks should hold no more than £5,000 in the digital pound.

The organization argues that otherwise it will lead to a massive outflow of deposits from financial institutions.

The UK Finance announcement is in response to recommendations from the UK government, which has proposed setting a digital pound holding limit of £10,000-20,000.

The association added that the authorities need to set clear goals for the use of the new means of payment.

“It is not clear from the consultation what place the central bank digital currency should take in the market,” UK Finance said.

This year, the UK released a consultation document that outlined the functions of the future CBDC.

According to him, the digital pound will be used along with cash “for use by households and businesses in everyday payments.”

Recall that in February, the head of the UK Treasury allowed the launch of a local digital currency after 2025.

Earlier, the Bank of England said that the digital pound can work without blockchain.

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