According to the Bank of England, CBDCs might account for up to 20% of retail and consumer deposits.
Sir Cunliffe made the following statement when questioned about the country’s growing interest in digital currencies and CBDCs:
“It’s tough to foresee how innovators will approach money and use it in the future. However, programmable money is beginning to appear in the crypto realm. And I believe we will see a comparable technologically-driven transformation in the functioning of money.”
Governor Andrew Bailey and deputy governor for financial stability Sir Jon Cunliffe of the Bank of England fielded questions from members of the Economic Affairs Committee in a live webcast on Wednesday.
The Bank of England is looking at the possibility of introducing digital pound CBDCs for retail payments. The CBDC tasks committee is also looking into using a digital pound to distribute payrolls, pensions, and other benefits.
Sir Cunliffe supports the project by pointing to the fast-dropping use of currency in the UK in recent years, which was hastened by the outbreak of the COVID-19 epidemic, which discouraged physical contact in transactions. E-commerce currently accounts for around 30% of all transactions in the country.
Nonetheless, Sir Cunliffe acknowledged that the current condition of crypto might jeopardize the country’s financial stability. In a short period of time, the market capitalization of cryptocurrencies has risen to $2.6 trillion, with an estimated 95 percent of digital assets being unbanked and 5% consisting of stablecoins.