UK Crypto Experts Highlight Risks of CBDC in New Report
The British Crypto and Digital Assets All Party Parliamentary Group (APPG) has released a report calling on the UK government to consider the potential risks associated with central bank digital currencies (CBDCs). The report stated that while there are many benefits associated with CBDCs, such as financial innovation and increased financial inclusion, potential risks must be mitigated, particularly those related to financial stability, privacy, and security.
The APPG report also urged the UK government to ensure that the introduction of any future digital pound does not stifle private sector innovation. The report suggested that the government should create the right conditions to attract inward investment and support existing businesses to prevent losing growth to other jurisdictions.
The inquiry was led by Dr. Lisa Cameron MP, who heads the Crypto and Digital Assets APPG, and drew input from various stakeholders within the industry, including operators, regulators, experts, and the general public. In addition to discussing the risks of CBDCs, the report also emphasized the need for comprehensive industry regulation to protect consumers and promote economic growth.
However, the report acknowledged that the UK remains in the early stages of regulating the cryptocurrency and digital assets industry and recommended that the government continue to develop a comprehensive framework that provides regulatory clarity, which will be an essential factor in attracting inward investment.
The report’s authors also highlighted the potential of cryptocurrencies to transform the established financial services system and noted that increased interest and adoption among consumers and investors indicate that “the sector is here to stay.” Nonetheless, it was stressed that the sector needs to be regulated comprehensively to enable it to reach its full potential.