• Sat. Feb 24th, 2024

UK’s digital pound project shows future of money is digital, says HANetf co-founder

  • HANetf co-founder & co-CEO Hector McNeil was commenting on the UK Treasury and Bank of England’s recent announcement regarding a digital pound.
  • McNeil says “cash is on decline” and that the “future of finance and money is digital.”
  • Yield App CIO Lucas Kiely last week told CoinJournal that the UK’s digital pound and CBDCs in general are not a threat to crypto.

HANetf co-CEO and co-founder Hector McNeil has commented on the recent announcement by the UK Treasury and Bank of England regarding the possibility of a central bank digital currency dubbed the Digital Pound.

As CoinJournal reported last week, the UK unveiled a consultation paper on the launch of the digital pound, with the BoE noting that if it ends up releasing the digital currency, its use would be alongside cash. Per the UK central bank, the digital pound would not replace the fiat currency even as the plan is to have more households and businesses adopt it for payments.

McNeil says the UK’s move is part of the government’s push to remain in control of the country’s financial system.

The future of finance and money is digital – HANetf’s McNeil

According to McNeil, “cash is on the decline, with growing numbers of consumers embracing digital payments,” a fact that sees the government view the digital pound as an important project.

The concern, he noted in comments shared with CoinJournal, is that the UK government feels the central bank issued digital currency is key to the BoE retaining control of the financial system.

The argument for the digital pound is that the UK state should guard its role of ensuring the stability and usability of money,” the fund manager said. He continued:

Of course, there are all sorts of potential questions about the future of the financial system. Would a digital pound mean less cash held in bank deposits? What does this mean for the business models of commercial banks and their ability to lend? In times of financial stress, would consumers remove their money from commercial banks to their digital wallet, creating the potential for a bank run?

McNeil pointed to the government “pre-empting” some of the above concerns with the announcement that there would be a limit to how much of the digital pound users would hold. Indeed, the Treasury has floated the idea of a limit of between 10,000-20,000 (digital) pounds in individual wallets.

What does this say of the digital pound then? McNeil thinks the idea of limiting what one can hold reduces the digital currency’s attractiveness.

With the current various methods of digital payments seamless and already in widespread use, what would be the incentive for consumers to instead use Digital Pounds in a limited wallet with restrictions on the amount held?” he posed. 

While the UK Treasury and the BoE might have to rethink this plan, the HANetf exec opines that recent announcements concerning the digital pound project confirms that “the future of finance and money is digital.”

Lucas Kiely, the CIO of digital wealth platform Yield App also thinks the launch of the digital pound would be positive for crypto. As highlighted in our coverage of the news last week, Kiely believes CBDCs are inevitable and do not necessarily pose a threat to crypto.

Rather, according to him, bringing traditional finance on-chain, such as through the digital pound, will only help spur further innovation and adoption of crypto.

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