Tom Hutton, the Bank of England’s (BoE) director of fintech, recently spoke about the UK’s central bank digital currency (CBDC) plans at the London Crypto and Digital Assets Summit. Hutton addressed the issues of privacy and anonymity in relation to the potential digital pound, stating that while the currency should maintain the highest standards of privacy, it should not offer anonymity.
No anonymity for the digital pound
During his talk, Hutton emphasized the distinction between privacy and anonymity, arguing that they should not be used interchangeably. He hinted that the potential for cryptocurrencies to be used for criminal activities, though estimated at a small percentage, could be a reason to avoid anonymity in CBDCs. Hutton declared anonymity “a public policy problem and something that should not be allowed to continue.”
Cryptocurrencies not interoperable with digital pound
Hutton also stated that cryptocurrencies would not be interoperable with the digital pound as they do not “fulfill any of the functions of money.” His comments follow a speech made in April by the Bank of England’s deputy governor, John Cunliffe, at the Innovate Finance Global Summit in London. Cunliffe discussed CBDCs and stablecoins, noting that while stablecoins could offer more payment efficiency, current offerings would unlikely meet the required robustness and uniformity standards.
The Bank of England has yet to announce a timeline for launching the digital pound or confirm its implementation. In February, the bank issued guidance suggesting that a digital pound may be necessary in the future, but the decision remains pending.
