Central Bank Digital Currency

Lord Tunnicliffe Excerpts

Tuesday 13th April 2021 Lords Chamber

[Baroness Penn (Con)]

I can absolutely reassure my noble friend on that point. A central bank digital currency would need to be a risk-free currency backed by the central bank, and it would need to coexist with and complement existing forms of money.

[Lord Tunnicliffe (Lab) [V]]

My Lords, I had not heard of CBDCs until I was faced with this Question. The briefing paper by the Bank of England in March 2020 is particularly useful. It is clear that the system very much depends on the successful integrity of information technology. A successful cyberattack on the systems would be catastrophic. What additional measures are the Government taking to complement the work of the Bank of England and the Treasury to ensure that any systems introduced are cyber robust?

[Baroness Penn (Con)]

My Lords, the Government have a leading cybersecurity programme. In addition to that, the Bank of England has committed to publishing a further paper this year on the potential financial stability impacts of digital currencies because, as the noble Lord notes, as well as the opportunities presented by these currencies there are risks that they could pose.