The digital pound should be at the center of the UK’s efforts to strengthen the City of London’s global appeal as a financial hub after Brexit, the think-tank CityUnited project said on Friday.
After the city secedes from the European Union on December 31, the finance ministry will propose Amsterdam to make London’s top stock trading hub globally, making the UK capital market more attractive.
Daniel Hodson, chairman of CityUnited, said the city now had an “inflamed majority” who believed it was better to adjust on producing the financial sector more competitive than delaying the transition in hopes of gaining access to the European Union.
“The central bank digital currency (CBDC) should be the foundation of a competitive city after Brexit, otherwise China will steal our attention,” Daniel Hodson told Reuters.
China plans to use its digital yuan to spend on the 2022 Winter Olympics in Beijing.
“The Bank of England is talking about central bank digital currency (CBDC) but it should be a big priority because this form of technology is the future, and will bring other benefits like real-time regulation to reduce costs,” Daniel Hodson said.
The BoE does not provide a time limit for any decisions.
CityUnited Founded by a Eurosceptic politician and City veteran Hodson, the London Futures Exchange, now part of the ICE, has made 24 recommendations for improving financial services.
He has just been handed over to a British government task force set up by Prime Minister Boris Johnson and is reporting on the use of Brexit “freedom” to cut red tape to boost returns this month.
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CityUnited said the digital pound would allow currency capital to be spent and tracked without the overhead and would help collect and distribute taxes in real-time and monitor the market more efficiently and in real-time.
He added that regulators should also ask to maintain the UK market’s attractiveness and openness and encourage the development of a “parallel market” for international investors to trade outside the group in Euro-recognized markets.