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UK government addresses privacy concerns in digital pound consultation

TL;DR

  • The UK addresses digital pound privacy worries, gaining experts’ approval with a “platform model” and plans for legislation.
  • The industry supports the government’s approach to privacy, where private firms, not government entities, handle user data.
  • Details on privacy laws and digital pound design are pending; public input continues.

The United Kingdom’s efforts to address privacy concerns surrounding the proposed digital pound have garnered positive responses from experts in the crypto industry. The results of the highly anticipated UK consultation on the digital pound were released by the Bank of England (BoE) and the Treasury, revealing that while many respondents welcomed the proposed design, privacy remained a chief concern.

Recognition of privacy concerns

Various legal and technical experts within the crypto industry have approved the UK government’s approach to addressing these concerns. Jannah Patchay, the executive director and policy lead at the Digital Pound Foundation, commended the government for recognizing privacy concerns at every stage of the consultation process, stating that they had done a “really good job” of keeping privacy in mind.

One proposed solution to privacy concerns is the Bank of England’s “platform model.” This model ensures that neither the central bank nor the government can access individuals’ data. Instead, private firms would establish direct and commercial relationships with customers, acting as wallet providers while complying with anti-money laundering regulations by collecting identity information.

Richard Gendal Brown, Chief Technology Officer at R3, described the platform model as an elegant solution to the privacy problem. Under this model, the central bank would only provide the core infrastructure and ledger for the digital pound, leaving the private sector responsible for user interactions.

Cautious government approach and legislative protection

The UK government has adopted a cautious approach to developing the digital pound, with a potential decision on its launch expected in 2025 or 2026. Any launch would require parliamentary legislation to safeguard individuals’ privacy, ensuring legal protections.

Varun Paul, Senior Director for Central Bank Digital Currency and Financial Market Infrastructure at Fireblocks, highlighted the government’s commitment to enshrining individual privacy and control in law as a reassuring factor for the public.

Several industry lobbying groups expressed their initial support for the government’s approach. CryptoUK, for example, welcomed the Bank of England’s and HM Treasury’s response to the digital pound consultation, especially the assurance that primary legislation would guarantee users’ privacy and control over the digital pound.

However, the specifics of the legislation to protect privacy remain unclear. Additionally, as the digital pound is still in its design phase, certain aspects of the proposal may evolve. Louise Abbott, a partner at Keystone Law, emphasized the need for more detailed information from the government and the Bank of England, including a clear plan of action and timeline for the next steps in the digital pound’s development.

Continuous public consultation

The government has committed to consulting more extensively with the public to ensure trust in the digital pound’s privacy safeguards. Richard Gendal Brown emphasized that the design should not merely promise not to access users’ data but ensure that the data is physically inaccessible.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Benson Mawira

Benson is a blockchain reporter who has delved into industry news, on-chain analysis, non-fungible tokens (NFTs), Artificial Intelligence (AI), etc.His area of expertise is the cryptocurrency markets, fundamental and technical analysis.With his insightful coverage of everything in Financial Technologies, Benson has garnered a global readership.

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