Getting the design of a digital pound right is a bigger priority than a rapid launch, Britain’s Financial Services Minister Andrew Griffith said on Tuesday.
China has pushed ahead with piloting a digital yuan and the European Central Bank is studying a digital euro, piling pressure on Britain to do the same and keep abreast of advances in financial technology.
The finance ministry is due to launch in the coming weeks a public consultation on the attributes of a digital pound.
“The consultation is going to say this is an if and not a when. We are not fully into the inevitability of doing this,” Griffith told the UK parliament’s Treasury Select Committee.
A digital pound raised many public policy issues, he said.
“We have got to get them right. I would rather be right than be first,” Griffith said. “It will be a long lead-time activity.”
The first case use of a digital pound would probably be in the settlement of wholesale financial transactions, he added.
But given public policy considerations for a digital currency, a wholesale, private fiat-backed stablecoin would probably get there first, Griffith said.
The European Union is also due to publish a draft law this year to legally set up and regulate a digital euro.
Griffith said there will also be a public consultation in coming weeks on Britain’s first general regulatory approach to cryptoassets, a sector where consumer protection has come under scrutiny in recent weeks.
The crash in bitcoin led to a ‘crypto winter’, which saw the collapse last year of crypto exchange FTX.
The European Union has set out the world’s first comprehensive set of rules for regulating crypto markets, which are due to receive final approval in the coming weeks, and come into effect in 2024.
Griffith said the UK rules could be broader to include decentralised finance.
“It’s right to get the basic sorted but only legislation does that,” said Charles Kerrigan, a crypto and digital assets partner at law firm CMS. “The industry is still seeing the UK as a place of regulatory uncertainty until we have something on the statute book.”
