Proposed Limit of £5,000 for Retail Ownership of Britcoins in the UK
UK Finance, the association representing the banking and financial sector of the United Kingdom, has recommended the Bank of England to impose a limit on private users' ownership of digital pounds, amounting to £5,000, according to The Times.
This recommendation stems from concerns that the introduction of digital pounds may result in a mass withdrawal of funds from financial institutions. It is a response to the UK government's proposal to set a storage limit for funds in this digital currency issued by the central bank, ranging from £10,000 to £20,000.
UK Finance, which represents over 300 local companies in the financial sector, believes that a lower limit will help avoid panic and fund outflows from commercial banks during the implementation of the British digital currency.
The digital pound, referred to as "Britcoin" by UK Prime Minister Rishi Sunak, is currently in the early stages of development and is estimated by industry experts to be released by the end of this decade. However, these plans have already raised concerns among British lawmakers, who believe that the country can utilize other resources to counter the proliferation of third-party digital currencies, especially well-known cryptocurrencies.
Many Britons are also worried about the future introduction of the digital pound and claim that it has more drawbacks than benefits. Among other things, users are concerned about the potential violation of their confidential data and the ability of officials to monitor them.
A recent survey conducted by Trezor, a cryptocurrency wallet manufacturer, revealed that citizens of the United Kingdom are concerned about the power that the government will wield through the digital pound. 73% of respondents expressed concern that the UK authorities may control access to their funds, and 67% mentioned that they worry about potential restrictions on spending.
Michael Forsyth, a member of the House of Lords and Chairman of the Economic Affairs Committee, stated in January that the committee was "genuinely concerned" about several risks associated with the issuance of a Central Bank Digital Currency (CBDC).
Meanwhile, the Bank of England assures that the digital pound will maintain data confidentiality and does not pose a threat to users.