Tech bosses have doubled down on calls for a central bank backed digital currency (CBDC) after a report by the house of Lords said there is not a “convincing case” for a state backed coin.
Russ Shaw, founder of Tech London Advocates, and Janine Hirt, CEO of Innovate Finance both said that a CBDC would be a key driver of innovation in the fintech and payments sector.
Shaw told City AM: “A CBDC, currently being evaluated through a HM Treasury Task Force, would create a further pillar of a digital payments ecosystem that is trusted and competitive.”
He said the review from the Lord’s was “testament to the government’s commitment to UK fintech” but warned that the “government must not be heavy handed with this”.
Hirt, boss of UK fintech industry body Innovate Finance, said that a CBDC would be “critical to maintaining the UK’s global competitive edge in financial innovation”.
She told CityAM: “It has the potential to bring significant benefits to the consumer in the long-term.
“The UK is a global leader in payments, and this has continued with data and AI driven products, open finance, embedded finance and finance platforms.
“CBDC, together with stablecoin, has the potential to drive a new transformation of payment services – and a UK CBDC would help maintain our leadership position in this space.”
The calls come after a Lords Committee warned that there were “significant risks” to intorducing a CBDC and that it would be “a solution in search of a problem”.
The fintech sector has previously called for a CBDC to be introduced. The Kalifa review of the fintech last year identified the introduction of a CBDC as a key measure to developing the sector domestically and cementing its place as a global hub.