Digital Pound

– in the House of Commons at 1:20 pm on 7 February 2023.

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Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury 1:20, 7 February 2023

Before I give my statement, may I add my voice to those in the previous statement on the Turkey and Syria earthquake? My heart goes out to all the people affected by that.

With permission, Mr Speaker, I will make a statement about the steps the Government are taking to consider the future role of a potential digital pound. His Majesty’s Treasury is today publishing and laying in Parliament a consultation paper jointly with the Bank of England, “The digital pound: a new form of money for households and businesses?”. This paper aims to open a national conversation about the future of money in the United Kingdom.

The way money is used in the UK is changing, as it is across the world. Cash will remain important, but banknotes, issued by the Bank of England, are being used less frequently by households and businesses. New technologies are allowing for the emergence of new forms of digital money, and new ways and devices to pay for goods and services with it. International developments have the potential to affect the UK domestically and our position as a global leader in finance. Ensuring that public trust in money remains high, and that forms of money and payments meet the evolving needs of individuals and businesses, are fundamental responsibilities of the Government on which Parliament must have its say.

We are determined that the UK should remain at the forefront of innovation in money, payments and financial services. This is part of the Government’s vision for a technologically advanced, sustainable and open financial services sector—a sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses and powering growth across all parts of the UK.

A UK digital pound would be a new form of digital money for use by households and businesses for their everyday payment needs. The digital pound would be a new form of sterling, similar to a digital banknote and issued by the Bank of England. For people and businesses, the experience of using a digital pound would be very similar to using other forms of digital money. For example, it would be accessible online via smartphones and computers, as well as through cards that could be used at point-of-sale terminals.

I want to be clear that the Government are legislating to protect access to cash and ensuring that the UK’s cash infrastructure remains sustainable long term. Therefore, as part of the wider landscape of money and payments, the digital pound would sit alongside, and not replace, cash —a digital counterpart to familiar, trusted banknotes and coins, and subject to rigorous standards of privacy and data protection. It would be denominated in sterling, and digital pounds would always have the same value as, and be interchangeable with, the equivalent physical banknote. Unlike cryptoassets and stable coins, the digital pound would be a central bank digital currency; sterling currency issued by the Bank of England, not the private sector.

A digital pound would help to ensure that money issued by the central bank—which is currently available only as cash—remains available and useful in an ever more digital economy. Knowing that there is an ultimate backstop to convert our money—money in our bank or e-money account—into cash or a CBDC at any time is the foundation of confidence in all forms of money, both day to day and in a crisis.

As cash is less and less used, the importance of a digital pound to provide that constant access to Bank of England-issued money could rise. It will safeguard the UK’s monetary sovereignty in a changing global financial system. It could provide a platform for private sector innovation, promoting further choice, competition, efficiency and innovation in payments.

On the basis of our work to date, the Bank of England and HM Treasury judge that it is likely that a digital pound will be needed. It is too early to commit to build the infrastructure for one, but we are convinced that further preparatory work is justified. A future digital pound would be a major piece of national infrastructure, which would take several years to complete. It would need to be safe and secure, and the legal basis for the digital pound would be determined alongside consideration of its design. Its launch would require deep public trust in this new form of money—trust that their money would remain safe, accessible and private.

The journey towards issuing any digital pound, therefore, necessarily involves an open national conversation about the future of our money, in parallel with important detailed technical consideration by experts across UK public authorities, and be informed by evolving market trends. The consultation we have published today will be open for four months. It opens that conversation and seeks to build the foundation of public trust. It sets out our vision of why a digital pound may be needed alongside our vision of how a digital pound could work, should we decide to issue one.

Like a physical banknote, no interest would be paid on the digital pound. Privacy, user control and use of data in line with UK data protection laws are of paramount importance. So I want to reassure the House that our vision for a digital pound would have the same privacy protections as bank accounts, debit cards or cheques. Neither the Government nor the Bank would have access to digital pound users’ personal data, except for law enforcement agencies under limited circumstances, prescribed by Parliament in law and on the same basis as applies to other digital payments. The digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime.

Drawing on the feedback we receive in the consultation, we are committed to move to the next phase of work. That will inform a future decision on whether to progress to building and launching a digital pound. I assure hon. and right hon. Members that a further update to Parliament will be made prior to that. It will also inform our current proposal for its form and function, decisions on which will be taken forward in the next stage. At this exciting time of change in money and payments, this consultation is a vital step in positioning the UK to act decisively, should we choose to introduce a digital pound.

Photo of Abena Oppong-Asare Abena Oppong-Asare Shadow Exchequer Secretary (Treasury) 1:27, 7 February 2023

I also want to put on record that my thoughts and prayers are with those affected by the earthquake in Turkey and Syria.

Labour welcomes that the Bank of England will be exploring the potential benefits of a central bank digital currency, or CBDC. With the rise of digital payments, and with the European Union, the US and China all exploring the use of CBDCs, we recognise the growing case for a state-backed digital pound to protect the integrity and sovereignty of the Bank of England and the UK’s financial and monetary system.

We fully support the Bank of England’s work on this area, but there are important questions that must be addressed before we decide whether the potential benefits of implementing a new payments infrastructure outweigh the risks. First, how will the Government ensure a digital pound guarantees the privacy of the public? Will people be able to freely access a digital pound from trusted institutions such as the Post Office, and not be forced to pay or hand over their data to tech companies? The take-up of a future digital pound will depend on public trust. People must know that their privacy will be protected.

Secondly, what work are the Government going to do to ensure that the potential CBDC does not accelerate financial exclusion? Millions of people are already cut off from the goods and services they need because of the decline of free access to cash. We need a cast-iron guarantee that the CBDC will not distract from work to promote digital inclusion or undermine protections for cash infrastructure. A digital pound must never replace physical money. We also know that around 5 million people are put off by digital banks. How will the Government ensure that those individuals are included in the Government’s joint consultation with the Bank of England?

The Economic Affairs Committee in the other place and officials at the Bank of England itself have warned that a digital pound could pose a risk to households and companies if they all withdrew money from commercial banks at once to put it into a Government-backed digital pound. What work will the Government be doing to put measures in place to protect against that?

I now turn to some of the inconsistencies between today’s announcement and the Government’s wider approach to cryptocurrencies. As the Bank of England made clear in its statement yesterday, one of the potential benefits of a state-backed digital pound is that it would have intrinsic value and not be volatile, unlike unbacked cryptoassets. That approach is welcome and contrasts with the Conservative Government’s promotion of the crypto wild west. I know that the current Prime Minister likes to see himself as a bit of a Californian tech bro, but in reality this is naive. This out-of-touch Government continue to waste taxpayers’ money and time on an NFT gimmick, and to promote dodgy stablecoins, despite millions of UK consumers’ savings being put at risk by scams and scandals in the crypto sector, and by the collapse in the value of cryptocurrencies.

I hope today’s announcement marks a break with this disastrous approach. The Government should be focusing on returning the economy to growth and dealing with the cost of living crisis, not chasing crypto fantasies. Only Labour has a serious plan for growth. A Labour Government will attract fintech companies to the UK by safely harnessing the potential of new technologies and through our ambition to make Britain the home-grown start-up hub of the world.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

It is always a pleasure to hear from the hon. Lady, in what I think was a welcome from His Majesty’s Opposition for the joint consultation between the Treasury and the Bank of England. She rightly raised issues that I assure her are addressed in the consultation, about which we would like to hear. They include how to ensure privacy, which will be embedded in the design. It is important that we come forward with, potentially, a digital pound precisely to avoid this space being colonised solely by, for example, private large tech companies.

I can assure the hon. Lady that this issue will not in any way distract from our important work on financial inclusion. Cash will indeed continue, and no part of the consultation talks about in any way replacing it. Rather, this is about ensuring access to that currency, so that potentially it will no longer be gated behind existing financial institutions; it could be something that new participants make available to citizens without some of the constraints that are sometimes put on the financial services system. The consultation also addresses the risk, which the hon. Lady rightly raised, should everybody withdraw their money all at once to invest in this digital currency.

However, the hon. Lady’s comments were a speech of two halves, and the second half was as wrong as it was unnecessary. This Government have never promoted a crypto wild west. The current Financial Services and Markets Bill contains more measures to protect consumers. The risks that consumers face have always been extremely clear, but when it came to financial promotions, one of the biggest challenges we faced was the Mayor of London and Transport for London, which gained a reputation for accepting particular adverts from the crypto industry.

Photo of Harriett Baldwin Harriett Baldwin Chair, Treasury Committee, Chair, Treasury Committee, Chair, Treasury Sub-Committee on Financial Services Regulations, Chair, Treasury Sub-Committee on Financial Services Regulations

The Treasury Committee has opened an inquiry into crypto, and this morning we had a session at which the chief executives of the major high street banks appeared before us. The real question we wanted to ask them was why they have been paying our constituents so little on their savings since the Bank of England started to increase rates. Is not the logical conclusion of the consultation process that my hon. Friend has opened today that each of us should be able to hold a digital currency account at the Bank of England, and to earn the Bank rate on our holdings and disintermediate the entire banking sector?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

I thank my hon. Friend for her, as ever, wise points, as well as her wise chairmanship of the Treasury Committee. It is absolutely imperative that savers get the interest rates that they are entitled to. I commend my colleagues in National Savings and Investments, who have significantly increased the rates offered to savers. Of course, she also raises one potential opportunity, in that, although a digital pound would sit alongside our existing financial services infrastructure, it potentially offers consumers and citizens a different choice, which could involve the ability to hold currency through intermediaries other than the current banks.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Economy)

When I was in the US with the Treasury Committee some years ago, we were given two choices: either 95% of all crypto was fraud and froth, or 100% of all crypto was fraud and froth. Clearly, a central bank-backed asset is a different beast; but nevertheless, I have three questions. First, what problem is this idea designed to solve? Secondly, what happens if this digital asset becomes volatile? If it stops behaving like a currency and starts to behave like a bond or equity, or debt, or something speculative like a non-fungible token, how will it be regulated? Thirdly, the Minister said the digital pound, in this new form, will always be worth the same as a traditional pound. What if the market determines that that is not true and there is a divergence between the fiat currency value and this new non-fungible, Bank-backed token? Who picks up the tab when people potentially start to lose money?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The right hon. Gentleman runs the risk, if I may say so, of confusing a particular attribute of what is a very large sector. This is not a cryptoasset; the digital pound would not have those speculative attributes. The fact that £10 in digital pounds would be fully exchangeable for £10 in His Majesty’s finest banknotes would prevent that divergence—if it did not, that would present the right hon. Gentleman with a profitable opportunity that he could use to supplement his other activities. He raises other questions, which are rightly the subject of the consultation. I extend the invitation to all parts of the United Kingdom, and we look forward to his constituents and compatriots being able to contribute.

Photo of Richard Fuller Richard Fuller Conservative, North East Bedfordshire

If I was the Minister, I do not think I would not be quite as confident in my response to the SNP Opposition spokesman: that a digital pound will not affect the pound in our pocket. However, I broadly welcome the consultation, and I am very pleased that this Minister will be overseeing it. He will be aware that during covid we went through a period of extreme authoritarianism in this country. He will also be aware of some of the risks from central bank digital currencies to individual financial freedoms—he enunciated some of them in his statement. At the end of the consultation, will the Minister therefore also look to draft a financial liberty charter that this House can vote on, to protect the freedoms that we experience with currencies today?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

My hon. Friend and, indeed, predecessor highlights one of the potential concerns: one is either instinctively too early or too late in bringing matters to this House. Although this is a long-term project—the consultation makes it clear that a digital pound would not be introduced before the second half of this decade—it is right that we start conversations on precisely the important matters that influence the liberty of every one of us at this moment in time. So while I will eschew his choice of words, I assure him that liberty remains paramount, which is one reason why it is very clear that any digital pound should not replace, but should sit aside, the anonymity that is currently offered by physical cash.

Photo of Stephen Timms Stephen Timms Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

I welcome the Minister’s statement. Firms setting up to deliver blockchain-based financial services in the UK complain that getting a licence here takes far too long because the Financial Conduct Authority does not have the capacity to process the applications. A number of very successful firms have been forced to leave the UK altogether as a result. What plans does the Minister have, as part of this work, to tackle that particular problem?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The right hon. Gentleman might usefully and productively have a conversation with his own Labour Front Benchers, who only a moment ago were accusing us of moving too fast. The two points show that the financial regulators have in this particular case got the balance about right in their approach to cryptoassets. He will also know that last week we published a proposal for the regulation of cryptoassets more generally. This is not a cryptoasset; this is a digital pound. He makes a point that others have also made to me about the speed with which our financial regulators reach their conclusion. I understand that point. Whatever conclusion they reach, it would be desirable that they do so in a way that is as effective as possible and gives as much certainty as possible. It is one reason why there are powers in the Financial Services and Markets Bill, which he will know is going through the other place at the moment, that will compel the financial regulators to publish more of their operating statistics, so that he and I will be able to see how they discharge their duty to regulate in an effective manner.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

Digital currencies in a whole range of formats are part of a fast-moving and dynamic sector of an emerging economy. To date, the regulators have struggled to keep up with the skills and capacity to bring about appropriate and effective regulation of the sector. What plans does my hon. Friend have to develop capacity within the regulators to give confidence in the marketplace that the digital pound, as well as other digital currencies, will have confidence among users?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

My right hon. Friend makes an important point. To govern is to choose and we ask our regulators to make choices to prioritise. It is one reason why we are looking at reform of long-standing areas, such as the 40-year-old Consumer Credit Act 1974, to see if we can modernise it and make it more fit for purpose, deliver better customer outcomes, and potentially free up the regulatory environment so they can make choices to focus on the new and emerging threats and opportunities that this domain represents.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

Further to the question from the Chair of the Treasury Committee, Harriett Baldwin, can the Minister be a bit clearer? Will this be an interest-paying currency, yes or no?

Photo of Danny Kruger Danny Kruger Conservative, Devizes

I have two concerns. The first is on privacy, which other Members have mentioned. The proposal is that the Bank of England can become your bank. The Minister says the currency will be private but not anonymous, but the reality is that in certain circumstances it could be neither. It should be possible for authorities to observe the transactions of any citizen if they have cause to do so. Will he confirm that? My second anxiety is on the implications for cash. Will the money used through this new digital mechanism require cash to be withdrawn from circulation in exact proportion? If not, his proposal to print new money will be a sort of cryptocurrency quantitative easing with inflationary implications. If cash will be withdrawn in proportion as the digital pound is issued, we are talking about the end of cash are we not? Progressively, the digital coin will replace the use of cash.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

I accept that the Command Paper has just been published, but when my hon. Friend has the opportunity, he will be able to look at the detail of the operation of such a scheme, which will reveal that there will be platform intermediaries. People will not have a bank account directly with the Bank of England, except in very narrow circumstances. I understand the concerns, and it is right that we debate the balance between freedoms and our duty to protect citizens from fraud and other things that this House, from time to time, will decide justify the piercing of that veil of privacy.

I want to reassure my hon. Friend on cash. By design, this proposal will not replace cash. From a monetary policy perspective—although that is something, as with all these questions, that Members may respond to during the consultation—it is envisaged that it certainly will not increase money supply, and the one-for-one nature I talked about earlier is important in that regard. To be clear to my hon. Friend, the arbiter of that decision will be individual citizens making the choice as to how they wish to use their money—how they wish to spend it and how they wish to store it.

Photo of Lisa Cameron Lisa Cameron Scottish National Party, East Kilbride, Strathaven and Lesmahagow

The crypto and digital assets all-party parliamentary group, which I chair, greatly welcomes the consultation and the progress being made by the Minister. We are hopeful that a digital pound could enable faster payments and lower cost payments to improve inclusion across the UK. The other issue I wish to raise is international interoperability, in particular with colleagues across the Commonwealth. Will the Minister look at what progress can be made in the realm of collaboration with Commonwealth partners?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

I thank the hon. Lady for her question and for her work as chair of the crypto and digital assets APPG. I hope it has been a productive number of weeks with the consultation paper on the regulation of cryptoassets and today’s joint consultation paper with the Treasury. The APPG does good work in educating and providing opportunities for Members of this House to engage with this rapidly growing area, which is important to financial inclusion and ensuring that we design in financial inclusion at the start.

The hon. Lady makes a very important point about international interoperability. About 90% of all member countries of the Bank for International Settlements surveyed are looking at doing something similar, so it is right that we engage. We have a strong position of leadership in the financial community, as well as an adherence to the highest quality regulatory standards. That is absolutely in keeping with what we are trying to achieve today.

Photo of Anna Firth Anna Firth Conservative, Southend West

I absolutely welcome the Minister’s statement and the commitment from him and the Government to keep the UK at the forefront of innovation in financial services. I heard his answer to Sir Chris Bryant that this will be a zero interest-bearing currency, but surely in the fullness of time we cannot have a situation where banks deposit their money at the Bank of England and get the full 4% base rate, while retail consumers and individuals get zero. If the Minister agrees with that, is this not a way to stop the consumer being ripped off by the big four and getting only 0.83% interest, while the banks are getting 4% from the Bank of England?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

I thank my hon. Friend for her endorsement of today’s proposals. She should know that I am as concerned as she is about the fair deal for savers in general. As interest rates have increased, it is absolutely appropriate that savers benefit. It is a virtuous activity, and one that we on the Conservative Benches are very keen to support. The issue of central banks paying other banks interest on deposits is complex. There is a matrix of regulatory advantages and disadvantages from the status of being a bank, and I would be very happy to engage with her more to understand that.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport)

I do hope that one day the Minister will come to the Durness highland games in north-west Sutherland. He will be very welcome, and he will see just how much money is taken out of the cash machine in Durness—by the way, what a battle we had to get it put back when it was removed! If he goes along the north coast to Wick, he will see how much money is donated to the Wick gala: it is gathered in small shrimp nets and buckets. Tapping an iPhone on a shrimp net simply does not work.

My point is obvious: we rely on cash. In my vast and remote constituency, access to cash is a real challenge if people have to travel huge distances. May I have an assurance that when the Treasury looks at safeguarding access to cash, it will take into account the challenges facing constituencies such as mine?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

It is indeed my aspiration to visit the hon. Gentleman’s expansive and rural constituency one day. Let me reassure him and the House that this long-term project will in no way take my or my officials’ time and attention away from any of the endeavours that have been put in place to promote access to cash. There are new powers in the Financial Services and Markets Bill, there are obligations on the regulators, and we are working with the banking industry and with Link.

As a Member who represents a rural constituency, albeit somewhat south of the hon. Gentleman’s, I fully understand the importance of access to cash for communities, for people who may be disadvantaged and use cash to budget, and for our increasingly elderly population. That focus remains, and it is not diminished by this longer-term project. As hon. Members, particularly Opposition Members, have highlighted, we have the opportunity to design in financial inclusion and to ensure that no matter who someone banks with, they can benefit from the UK digital pound.

Photo of Aaron Bell Aaron Bell Conservative, Newcastle-under-Lyme

I thank the Economic Secretary for his statement and for the consultation. Perhaps it is apt that it is being launched on the day we have a new Department for Science, Innovation and Technology. That shows that this Government are taking the long view, as well as managing the short-term pressures that we are going through.

The Economic Secretary mentioned public trust, which will be crucial. In launching the digital pound, what measures will the Government be willing to take to safeguard people against the risk of scams? As we have seen with cryptocurrencies, with bank cards and with online banking, people are vulnerable to scams when things are new. What measures do the Government envisage to ensure that launching a digital pound does not put people at risk?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

My hon. Friend makes two important points. The first is about the long-term nature of this Government, whose focus on delivery extends to the Prime Minister’s organisation of Departments to ensure that they deliver the outcomes that the British people expect.

My hon. Friend also highlights the importance of financial education. I can commit that, as part of the national dialogue on this important issue, we will give thought to how we ensure that we educate our citizens to prevent them from falling prey to the terrible financial scams that people are trying to perpetrate in the financial system today.

Photo of Martin Docherty Martin Docherty Scottish National Party, West Dunbartonshire

I declare non-pecuniary interests as chair of the all-party parliamentary group on blockchain and as a vice-chair of the crypto and digital assets all-party parliamentary group. I am glad to see the co-chair, Sir Stephen Timms, in the Chamber.

The Minister will know that I led the first debate in this House on cryptoasset regulation; I think he was the Minister who responded. Central bank digital currencies played a major part in my speech, so I welcome the opportunity for a consultation. For all the bad press that cryptoassets have—alas, justifiably—received, there exists an undeniable opportunity, as I am sure he will appreciate, for CBDCs to create an accessible, reliable store of value using the principles of distributed ledger technology. Will he elaborate on the aspects of financial inclusion he hopes to bring forward to ensure equal access to the CBDC for the most digitally excluded of our constituents, not just for the crypto bros?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

I thank the hon. Member for his contributions to the ongoing debate. I have said that there is an opportunity for us to design in financial inclusion; that is one of the advantages of consulting early and of building a consensus across the House on a subject as important as our nation’s currency. He is quite right that it needs to be accessible and reliable as a store of value; the opportunity for it to sit side by side with cash and with the existing bank and digital payments system should give us the ability to drive financial inclusion outcomes.

Photo of Antony Higginbotham Antony Higginbotham Conservative, Burnley

I welcome the Minister’s statement and the foresight that he and the Treasury are showing in getting the consultation out early. What assessment has the Treasury made of the potential impact on our small and medium-sized enterprises—particularly import and export SMEs, which are big users of foreign currency?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

As my hon. Friend knows, one of the points of friction—one of the costs—is the exchange of currency. It has come down greatly over time, but is still often measured in the percentage points. A true central bank-issued digital currency—a digital pound—that could be much more readily converted without the current number of intermediaries could be a real opportunity for small and medium-sized enterprises engaged in that all-important activity to our great nation: exporting our goods and services.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

I thank the Minister for his statement. I and many of my constituents, like those of other hon. Members, are still committed to using cash. How will the Minister ensure he sends a message that today’s announcement does not mean that we are moving to a cashless society? How will he secure access to cash? It is already at risk in rural areas as a result of banks’ continuing withdrawal and centralisation, which is leaving people with no option but to operate digitally even when they feel vulnerable and feel that their finances are at risk.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

Today is not about access to cash; it is about the long-term plans for a digital pound. However, the hon. Member makes a very well-understood point. We are legislating in the Financial Services and Markets Bill to ensure that, for the first time in this country since the Celts minted the original currency, communities will have a statutory right of access not just to withdraw cash, but to deposit it, because it is the ability to deposit that drives the desire of retailers and others to take cash. We want cash to continue to circulate in our society, and we are making provision for that in the Bill, which I hope will soon be on the statute book.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Education)

I have a couple of questions about safeguarding. The Minister said in his statement that the Government will not

“have access to digital pound users’ personal data, except…under limited circumstances”.

Can he give me an assurance that those circumstances will not include Government agencies aggressively targeting vulnerable individuals, for whatever reason?

Several hon. Members have mentioned cash. We know that cash can give people financial independence, particularly if they are in a coercive relationship: not having somebody see every single spending decision they make gives them a slight amount of independence. What safeguards on the digital pound will be put in place to ensure that people still have that protection?

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

I thank the hon. Member for those points; her point about safeguards against coercive control in particular is well made. This is where something like a digital pound can have utility: unlike existing banking relationships, but like cash, it is not subject to the caprices of a particular commercial entity that may apply its own policies. I commend our payment services industry—the UK is blessed with a strong, healthy and competitive banking sector—but for the safeguards that the hon. Member seeks, the digital pound would be additive to the current situation.