The way money is used is changing, the relentless march of cryptocurrency has changed the perception of how money is dealt with. The emergence of digital money and its various applications has provoked governments across the world to recognise that they will be left behind unless they evolve.
The United Kingdom is a global leader in finance, with London's Stock Exchange eclipsing New York's by nearly one hundred years. In order to remain at the forefront of innovations regarding money and to support the Government's ambition to be a technologically advanced, globally competitive cryptoasset hub, the Bank of England is planning to introduce a new form of money – the digital pound – known as central bank digital currency (CBDC). The Bank is quick to point out that this would not be a new cryptocurrency, because these are issued on a private basis and their value is volatile. The CBDC will be a government-backed currency designed to retain its value over time
Demetri Bezaintes, an associate, commented "the introduction of a digital pound by the Bank of England could have ramifications as members of the public may be slow to take up the new currency," Demetri further pointed out "also, financial fraud is rife and the fraudsters will be quick to imply that their fake investment scams are linked or similar to the Bank of England's new initiative. On the plus side, the introduction of a digital pound by such a significant entity would almost certainly bring in its wake robust regulation and the tightening up of protocols to protect users in their day-to-day spending. Whilst this would not prevent wrongdoers from attempting fraud it may very well lead to intervention before the fraud can be perpetrated."
The proposed digital pound is aimed at providing efficiency and innovation in the functionality of payments in the UK. The Treasury believes that a digital pound will be needed in the future but also recognises that it would require a vast piece of financial infrastructure at a national level with the flexibility to allow businesses to more freely experiment with new products and services.
The success of the Bank of England's proposed digital pound, if it is introduced, will hinge on public trust. Households and businesses must have confidence that their money is safeguarded and available and that rigorous standards are in place to facilitate this.
For some time, the convenience of the use of electronic payment has not only been accepted but has accelerated with well over 60% of all card payments being contactless and most of those being made online. It is estimated that nine in ten adults use their smartphone to make payments. However, approximately 1.2 million adults in the UK do not have a bank account and there is a significant number of people who use cash as their preferred payment method.
If the technical capability to provide a digital pound is eventually introduced it has the potential to expand the UK's reputation as a world leader in the technological and financial sectors, which, in turn, will enhance competitiveness, expand business into other markets and create jobs.
Demetri Benzaintes has a thorough knowledge of investment fraud and fund tracing. He works tenaciously for our clients, advising oncryptocurrency, Forex trading disputes and regulatory investigations. He draws his expertise in investment law from his experience in the banking sector and his studies in banking and financial services regulation. Before joining Giambrone & Partners Demetri worked at an international bank, where his main focus was the enforcement of freezing orders and third-party debt orders.
He approaches cross-border jurisdiction matters with a comprehensive view, based on his knowledge of both civil and common law. After qualifying as a lawyer in Greece, he obtained a Graduate Diploma in Law from the University of Westminster and is currently studying for the LPC at the University of Law.
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