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The UK could be the first country to design CBDCs to help people not banks

The UK could be the first country to design CBDCs to help people not banks

Last night’s landslide victory of the UK’s Labour Party in the general election saw little to no mention of Bitcoin, blockchain, or digital assets.

Leading up to the election, the party’s manifesto remained silent on crypto or Bitcoin at a time when the topic is becoming increasingly prevalent in the US election race. However, Labour’s previous statements and plans suggest a cautious yet open stance toward blockchain technology. While not directly addressing crypto, Labour has shown interest in related technologies, such as the support for the tokenization of assets.

Shadow Chancellor Rachel Reeves and Shadow City Minister Tulip Siddiq have shown openness to the tech sector. Siddiq, in particular, has stated that if Labour is victorious, it would aim to transform the UK into a global center for tokenized assets.

Labour backs Digital Pound, but what could it look like?

Labour’s financial services plan, “Financing Growth,” acknowledges the growing case for a state-backed digital pound and emphasizes the need for “financial products to reach underserved communities.”

“Embrace innovation and fintech as the future of financial services by becoming a global standard-setter for the use of AI in FS, delivering the next phase of Open Banking, defining a roadmap for Open Finance, embracing securities tokenisation and a central bank digital currency, and establishing a regulatory sandbox for financial products to reach underserved communities.”

The party has fully supported the Bank of England’s ongoing work in this area, indicating a commitment to continue exploring and developing a CBDC.

However, Labour’s approach appears measured and potentially unique from other planned implementations. They have highlighted the importance of addressing key concerns such as privacy, financial inclusion, and stability in designing any potential CBDC. This potentially more balanced perspective suggests that Labour is not rushing headlong into digital currency implementation but instead taking a considered approach that prioritizes public interest and economic stability.

Labour’s plan also emphasizes the importance of making the UK a global hub for securities tokenization. This focus on exploring the tokenization of securities indicates a forward-thinking approach to financial services that could enhance the UK’s position as a fintech leader.

The party has expressed intentions to advance open banking initiatives, explore the potential of open finance, and…

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