Central Bank Digital Currency inquiry launched by Economic Affairs Committee
Thursday 16 September 2021
The House of Lords Economic Affairs Committee, chaired by Lord Forsyth of Drumlean, today invites written submissions to its new inquiry on the economics of Central Bank Digital Currencies (CDBC).
HM Treasury and the Bank of England are exploring the potential of a possible CBDC for the UK. The committee will take evidence on the main issues confronting HM Treasury and the Bank as they conduct this work. It will also examine how a CBDC might affect the role of the Bank, monetary policy and the financial sector.
The Committee seeks answers to the following questions:
- What are the main issues driving central banks to explore CBDCs?
- What are the main benefits and risks of a CBDC?
- Could the proposed benefits of a CBDC be achieved through improvements to existing payment systems?
- How should the Bank of England and HM Treasury address concerns over privacy and traceability of payments when exploring CBDC design?
- What effects might a CBDC have on the financial sector?
- What effect might a CBDC have on competition and innovation in the payments and fintech sectors?
- How might a CBDC affect monetary policy?
- How might a CBDC change the Bank of England’s role and responsibilities?
- How should HM Treasury and the Bank of England engage with the public on the research and development of a CBDC?
- How might CBDCs affect the economic foreign policies or geopolitical influence of different countries and economic areas? Are there implications for the effectiveness of economic sanctions?
Lord Forsyth of Drumlean, Chair of the Economic Affairs Committee, said:
“New cryptocurrencies have generated a great deal of excitement, and concern, across the globe. The Government and Bank of England must carefully consider the implications of creating a new, state-backed, form of digital cash.
“To inform our work we want to hear from as broad a range of people as possible. If you have a view on any aspect of Central Bank Digital Currencies, look at our call for evidence and let us know what you think.”
The deadline for the submission of written evidence is 15 October 2021.
Read the call for evidence and find out how to submit evidence.
In the last two years the Economic Affairs Committee has published reports on Quantitative Easing, the impact of the coronavirus pandemic on employment, Universal Credit, social care, High Speed 2, measuring inflation and post-school education. Following the publication of these reports the Government announced a review of its own social care policy and an independent review of High Speed 2.
The Committee’s post-school education report called for a change to how student loans are recorded in the public finances. Within six months of publication the Office for National Statistics did just that and reclassified as public spending the amount of student loans expected not to be repaid.
