Why central bank digital currencies are terrible

The government and Bank of England seem to have finally woken up to one of the many glaring problems with trying to achieve a cashless society: that there are 1.3 million people in Britain who do not have a bank account. Whether that is because of long-established habit, because they don’t trust banks or because banks don’t trust them, it is an awful lot of people to contemplate shutting out of the economy. Presumably, they would have to resort to some form of barter, or to establish unofficial currencies such as cigarettes, used in jails.

But the solution suggested by Jeremy Hunt and Andrew Bailey seems itself wrapped in problems. They have suggested creating a Bank of England digital pound by 2030 which could be used without a bank account. Trouble is that four per cent of the population – almost the same proportion who do not have a bank account, and quite possibly the same people in many cases – don’t have internet access either.