• The UK will need to introduce new laws or amend existing finance and data rules to accommodate a digital pound.
• Should the country decide to issue a CBDC, existing data protection, security and anti-money laundering rules would need amending.
• The U.K.’s neighbor, the European Union, is looking to publish a bill setting out what a digital euro will look like this year.
Overview of Digital Pound
The Bank of England and the U.K. Treasury are seeking public feedback on their plans for the design of a digital pound – something officials say is likely to be needed in the future.Should the country decide to issue a CBDC, existing data protection, security and anti-money laundering rules would need amending. The legal framework for a digital pound would also need developing with regards to policy and technology terms.
Impact on Existing Rules
Should the country decide to have a central bank digital currency (CBDC), new legislation will be needed to lay out the characteristics of a digital pound and current data, privacy and anti-money laundering rules should be amended to accommodate such a currency, two lawyers told CoinDesk. Louise Abbott, partner at U.K.-based Keystone Law said: “There’s no such thing in this country as a central bank digital currency, so they would need to create new legislation around what that would look like and that’s part of the consultation process.“ George Morris, partner at Simmons & Simmons echoed Abbott’s comments.
EU Action on Digital Euro
The EU has chosen to create new regulatory regimes to address crypto assets or even a digital euro while The U.K., has so far tried to accomplish similar goals by extending existing frameworks which it may take up with the introduction of its own Digital Pound initiative too.. This year EU is looking forward publishing a bill setting out what exactly does this digital euro looks like which will tackle finer points of applications supported by it along with technology used for it as well .
Treasury’s Plan For Digital Pound
The Treasury and Bank of England are moving towards phase two in order develop model for their proposed Digital Pound both in terms policy as well as technology terms . This includes creating legal framework comprising both policy along with technical aspects required for its implementation .
Issuing CBDC is set bring changes not only related with technology but also regulations related with data , privacy , security etc needs amendments before such currencies can see light day . In conclusion funds having clear idea about how things works now along with looking into actions taken by other countries can help them formulating sound policies leading towards successful implementation .