The Director of Financial Technology Development at the Bank of England said that the digital pound is being created to preserve user privacy but will not be anonymous.
Tom Mutton, speaking at the Financial Times conference on digital assets, assured that the central bank has never sought to make the digital pound completely anonymous because the UK has a very high level of financial crime..
At the same time, the regulator is open to consultations on preserving the anonymity of transactions with small amounts.
A top Bank of England executive acknowledged that cryptocurrencies are often used for anonymous payments, an issue that should not be overlooked.
According to the analytical company Chainalysis, in 2022 the illegal transactions with cryptocurrencies reached a record high, exceeding $20 billion.
Therefore, stricter oversight of financial transactions would prevent crime, Matton believes.
The official confirmed that the digital pound will not be compatible with cryptocurrencies, as they do not serve as a means of payment.
Regular users will interact with the digital pound through private providers.
These companies will be able to offer enhanced services in exchange for customer data, but the central bank itself will not receive personal information, Matton assured:
“The digital pound was never intended to provide anonymity..
We have no reason to offer people CBDC unless it meets the highest standards of privacy. All electronic payments create a digital footprint.
The question is who gets the data and what are the conditions for its use.”
A few years ago, Matton called central bank digital currencies the safest form of money.
He explained that despite the use of blockchain, their architecture is significantly different from conventional stabelcoins.