The Bank of England asked for comments about its idea for a digital currency: 'The digital pound: a new form of money for households and businesses'.
My submission was as follows:
''I disagree with the proposal for a digital currency. It will disrupt the current banking model as this will have a tendency to reduce funds deposited with ordinary banks which will reduce banks' scope to engender loans to customers. The proposal for centralizing normal retail banking implicit in a centrally controlled digital currency is a bad move and against the promotion of the freest flow of money to viable businesses through the relationship a bank has with its customers.
Many people would possibly completely, or substantially, exit from their normal banking for much of their financial business and the existing banks will thus become weaker players in the promotion of the many local economies that comprise the national economy.
The nation needs more banks of the normal current retail type and for them to be more localized particularly when they are involved in small and medium businesses who need credit to grow and provide employment.
The idea of a central digital pound brings a danger that a central authority might, despite the privacy enhancing procedures proposed, in the extreme be able to control the spending freedom of every citizen for ideological or political reasons which is obviously with our current outlook, to be avoided. The banks are good at spotting fraud currently perpetrated and there is no need to use the reason of central surveillance possible through a digital pound as being essential for preventing scams.''
Charles
Bazlinton 30 June 2023
In the Financial Times article 'Central Banks should not be blind to the threats posed by CBDCs' (25 July 2023) Eswar Prasad author of The Future of Money also warns about digital money.
Posted by Charles Bazlinton 26 July 2023
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