Bank of England officials are privately weighing whether to shelve the retail-facing “digital pound” project, just six months into its formal design phase. Internal memos, first reported by Bloomberg, reveal the central bank is “no longer convinced the benefits outweigh the execution risk or the political noise.” If confirmed, the pause would see resources shifted toward modernising the UK’s ageing Faster Payments infrastructure and advancing the £1 billion RTGS renewal programme.
No final decision has been announced. The Bank’s digital pound remains in its 2023–26 design phase, meaning the BoE and HM Treasury Taskforce can legally freeze spending without new legislation. Officials suggest that, in the event of a pause, focus would move to upgrading domestic payments and pursuing wholesale-only digital currency experiments.
The development comes as Governor Andrew Bailey’s public scepticism towards the project has grown more pronounced. Speaking in Kyiv in June, Bailey stated, “Not yet convinced we need new forms of money for retail use.” Deputy Governor Sarah Breeden, responsible for financial stability, echoed those concerns, warning that a retail digital pound could risk “bank disintermediation.”
Political considerations also weigh heavily. New Chancellor Rachel Reeves is understood to favour projects that deliver results for voters ahead of the 2029 election, with Labour’s first Budget due in November expected to focus on visible payment upgrades. A 2023 Treasury Select Committee report warned that a digital pound could cost as much as £2–3 billion, describing the scheme as “a solution looking for a problem.” Meanwhile, back-bench unease persists over user-privacy and “Britcoin conspiracy theories,” sapping cross-party support.
On the technical front, the BoE’s Real-Time Gross Settlement (RTGS) renewal went live with a new core ledger in April, delivering 24/7 settlement, ISO 20022 data, and programmability hooks—features that overlap with some digital pound goals. The central bank also recently published a design note highlighting “material interoperability complexity” between any future retail CBDC and the next-generation retail payments infrastructure (RPI).
Market response to the reports was muted, with sterling unchanged and industry reaction mixed. The Digital Pound Foundation called for “clarity, not drift,” while UK Finance, representing the banking industry, welcomed relief from concerns about deposit flight. Fintechs and wallet providers may now look to regulated stablecoins and account-to-account schemes to fill the retail innovation gap.
Globally, momentum for retail CBDCs is slowing. While Brazil and India are advancing pilots, Australia, Canada, and Sweden have slowed efforts. In contrast, the European Central Bank released its third digital euro progress report in July, signalling continued momentum on the continent. The US has taken a different path, passing stablecoin regulation that gives private tokens an increasingly legitimate role.
If the UK confirms a pause, focus will shift to wholesale CBDC experiments and domestic payments upgrades. Autumn’s Budget and the 2026 “decision gate” on digital currency will be key moments for the future of money in Britain.
