Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of the introduction of a central bank digital currency on deposit outflows for commercial banks.

In February 2023, HM Treasury and the Bank of England published a joint consultation on a UK central bank digital currency (CBDC). The consultation noted that a UK CBDC, or ‘digital pound’, is likely to be needed in the future. However, a final decision has not yet been made and will be informed by this consultation and future work.

As part of this consultation period, HM Treasury and the Bank of England will carefully consider how the digital pound could impact the commercial banking sector, as well as any potential deposit outflows and any substantial shift in retail banks’ funding models.

A response to this consultation will be issued in due course.