London should focus on developing a digital pound to attract more investors into its capital market after the United Kingdom’s exit from the European Union, Reuters reported.
- Think tank CityUnited Project Chairman Daniel Hodson said there is now a “swelling majority” in the city that believes it is better to make the financial sector more competitive rather than delay change in hopes of getting EU access.
- Hodson said a central bank digital currency (CBDC) should be a fundamental foundation for a competitive city after Brexit.
- Without a digital pound, Hodson said, London could lose investors to China which is planning to launch its digital yuan at the 2022 Winter Olympic Games in Beijing.
- Britain’s finance ministry is due to set out proposals for making its capital more attractive after Amsterdam ousted London as Europe’s top share trading center following Brexit.
- Hodson said the Bank of England is talking about a CBDC, but this should be a greater priority as this form of technology is the future and would bring benefits such as lower costs. The BOE has given no timeline for a decision.
- CityUnited has made 24 recommendations for reforming financial services to a U.K. government task force set up by Prime Minister Boris Johnson.
- CityUnited said a digital pound would allow fractions of a currency to be spent without overhead costs. This will also be more efficient and allow real-time supervision of markets.