UK Treasury select committee urges central bank and other institutions to exercise caution over rollout of retail digital pound

UK lawmakers urged a cautious stance on implementing a retail digital pound, stressing the importance of finding a balance between technological advances and potential pitfalls. Members of the country’s Treasury Select Committee have expressed reservations about the possible launch of a retail digital pound, saying a thoughtful review would be needed before implementation. While recognizing the potential advantages in terms of innovation, the Committee urges the Bank of England (BoE) and the Treasury to thoroughly assess the need for this step, taking into account the associated costs and risks. In the interim, the committee's report recommended imposing a lower initial limit on the value of the retail digital pound to mitigate the risk of potential bank runs during periods of market instability. This specific precautionary measure is intended to prevent large transfers of deposits to digital wallets, which could increase the risk of bank failure and raise the cost of lending. (Cointelegraph)