Pretty sure my pounds have been digital for decades
> the way we pay for things becomes more digitalised
From the tap-to-pay token in my pocket through to the PDF monthly statements, how much more digital can it get?
> the potential for large and rapid outflows from banking deposits into digital pounds
> including the need for a central ledger to store user balances.
Ah ha - this is really just an attempt to create one single place to hold (ultimately) everyone's basic "chequing account", taking them all away from the high-street banks. That can't possibly have any down-sides.
Transaction fees, including conversions to and from BritCoin (you know it'll end up being called that, or worse - Coiny McCoinface!)? No risk of creating an effective split in who uses which (if bonk-to-pay works equally well for the customer, why would customers want to pay to convert?) so traders have to provide both services and absorb those fees as well, making for an expensive and confusing transition period.
Sorry, what was the point of this again?
> UK can't dismiss CBDCs, because its trading partners and allies are already working on their own equivalents
Well, we already pay conversion fees for cross-currency trading, so what does it matter to anyone if we're spending Sterling to buy Rupees or ERupees? We just get whichever our trading partner wants and take the conversion fees into account when deciding if the trade is effective.
How about if the two Ecurrencies were mutually convertable without any fees, that would help. They could peg them together as well, get rid of all those arbitrage costs and uncertainties as well.
One World Currency?