People of Britain would be limited to 20,000 digital pounds ($24,000) each if the country adopts digital currency, Jon Cunliffe, Deputy Governor of Bank of England (BoE), said on Tuesday.
In a speech, Cunliffe said, “We propose a limit of between 10,000 pounds and 20,000 pounds per individual as the appropriate balance between managing risks and supporting wide usability of the digital pound.”
Cunliffe said a limit of 10,000 pounds would mean that three-quarters of people would get paid in digital pounds and hold pre-existing balances in the same account. While having a 20,000 limit would enable everyone to use digital pounds for daily transactions.
He told members of a banking industry body, UK Finance, that money beyond the limit would be “swept” into a customer’s commercial bank account as a digital pound would not be a way of hoarding wealth.
“At the other end, you could say I need a little wallet full of internet cash to buy things on Amazon”, he added.
Britain’s government and the BoE were working on a possible digital pound that was expected to come in the second half of this decade as well as kept in a “wallet” facilitated by banks, although the final decision is yet to be made, the government said on Monday.
With the European Union set to publish a draft law in May laying out a legal framework for a possible digital euro, central banks worldwide are studying digital currencies.
The law would require approval by EU states and the European Parliament, though it will be for the European Central Bank to decide whether to go ahead with a digital euro.
In a conference on Tuesday, Burkhard Balz, executive board member of Germany’s Bundesbank, said an essential aspect is to decide whether a digital euro would receive legal tender status, that is, it could be used for debt settlement in court.
A digital pound would have equal legal status as cash, Cunliffe said.