(Adds detail, background)
LONDON, Feb 4 (Reuters) - The Bank of England (BoE) and
Britain's finance ministry think the UK is likely to need to
create a central bank digital currency (CBDC) later this decade,
the Telegraph newspaper reported on Saturday, citing an
unreleased government report.
"On the basis of our work to date, the Bank of England and
HM Treasury judge that it is likely a digital pound will be
needed in the future," the Telegraph quoted BoE Governor Andrew
Bailey and finance minister Jeremy Hunt as saying in the joint
report.
"It is too early to commit to build the infrastructure for
one, but we are convinced that further preparatory work is
justified," the Telegraph quoted the report saying.
The BoE declined to comment on the Telegraph article, but
said a joint consultation on CBDC issues would be published
shortly.
A government source said the report would be published next
week.
BoE Deputy Governor Jon Cunliffe is due to give a speech on
Tuesday to update the finance industry on the BoE's CBDC work.
Britain's Prime Minister Rishi Sunak asked the BoE to look
into the case for a CBDC in 2021 when he was finance minister,
and in October financial services minister Andrew Griffith said
Britain could not avoid the issue indefinitely.
A CBDC would allow a wider range of businesses - and
potentially individuals - to hold electronic money in accounts
directly with the BoE, potentially cutting out banks which have
this right at present.
The Bank of International Settlements, a forum for central
banks, said in June that CBDCs are needed to modernise finance
and ensure Big Tech does not take control of money.
The Telegraph reported that the proposals being explored by
the BoE did not include allowing individuals to hold accounts
directly with it.
The European Central Bank is working on a digital version of
its currency and is in the process of outlining the broader
design. Last month it said it would not offer personal bank
accounts but would allow person-to-person payments.
China has conducted the largest cross-border CBDC trial to
date.
(Reporting by David Milliken and Elizabeth Piper; Editing by
Alexander Smith and David Holmes)
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