The Bank of England does not see any reason to rush the creation of a digital currency for the UK.
Sarah Breeden, the Deputy Governor of the Bank of England, made this clear, as the central bank is set to decide before this year runs out whether or not to build a digital pound.
Why Breeden is looking at private money first
Breeden made the point that the speed of innovation in digital payments means there is no immediate need for the central bank to build a digital pound, since commercial stablecoins and tokenized bank deposits can take care of the gaps a digital pound would have fixed.
Breeden’s tone suggests that privately issued digital money remains a core part of the UK’s payments plans as opposed to a state-issued coin.
The bank also seeks the success of sterling-denominated stablecoins, so British households and firms do not turn to dollar-pegged stablecoins for new payment services.
Currently, there is a huge lacuna to fill in the cryptocurrency market. Sterling stablecoins account for less than $6 million in a $308 billion market, as of late 2025. The dollar tokens take up most of the market right now.
A decision that keeps sliding toward year-end
A decision has still not been made, but the central bank and HM Treasury remain in the design phase, which is expected to end in 2026.
In a progress report released on 4 March 2026, the Bank of England announced the drafting of a detailed blueprint that would emerge after experiments in its Digital Pound Lab and extensive discussions with industry leaders and civil society.
That evidence will be considered alongside a joint Bank and Treasury assessment, deciding whether or not to proceed with the modernization of UK payments.
The Bank has said it will announce its decision in 2026, to be released together with the blueprint and the joint assessment. As the year comes to a close, Deputy Governor Breeden’s “no rush” message gives a pointer as to which way the central bank is leaning.
The stablecoin regime moving quicker than the CBDC
Before a digital pound is released, the Bank of England has written down its stablecoin rules. On 22 June 2026, the central bank released a policy statement and draft Code of Practice for systemic sterling stablecoin issuers.
The policy statement replaced earlier holding caps with a temporary issuance guardrail pegged at £40 billion or $52.9 billion per coin. Issuers now have the liberty to hold as much as 70% of their backing assets in short-term UK government debt, an increase from a proposed 60%, with the other 30% to be held in unremunerated deposits at the Bank.
Redemptions must clear within 24 hours, and paying interest on holdings is banned.
Testing where a digital pound might fit
The experiments have not ended. A cross-border trade finance test is being run by the bank’s Digital Pound Lab, together with Polygon Labs, NOBO Finance, and business-data provider Dun & Bradstreet.
The goal is to see whether or not stablecoins and a simulated digital pound can settle different legs of the same deal, as Cryptopolitan reported in August.
The objective is to reduce settlement delays for small exporters and importers, who are made to wait days to receive payment after shipping goods.
The Lab is not using actual money or real customers, even as the Bank says the experiment does not mean the Bank has decided on issuing a digital pound. Applications for the Lab’s Phase 2 closed at the end of March 2026.
If you're reading this, you’re already ahead. Stay there with our newsletter.