Some time before the end of this year, the Bank of England and HM Treasury will publish three documents at once: a detailed blueprint for a retail digital pound, a joint assessment of the case for building it, and a decision on next steps. The Bank’s most recent progress update, published on 4 March 2026, put it plainly. The design phase ends in 2026, and the blueprint, the assessment and the decision “later this year” come as a package.
That is the moment the project has been travelling towards since the February 2023 consultation paper, which drew more than 50,000 responses, and the joint response the Bank and the Treasury published in January 2024. What has changed in the intervening three years is not the design work, which has proceeded on schedule, but the question the design work is meant to answer.
What the design phase actually produced
The Bank has built the machinery it said it would. The Digital Pound Lab, launched in August 2025, gave firms an experimental platform on which to test use cases and business models rather than argue about them in consultation responses. Phase 1 took four participants: Fluxpay, LINK working with Consult Hyperion, NOBO Finance with Applied Blockchain, and Yotra. Their showcase ran in January 2026. Phase 2 closed for applications on 31 March 2026 and ran through to July.
The blueprint itself is organised around four components: product strategy, scheme and regulation, technology, and operations. The architecture has not moved either. The Bank would run a core ledger; private firms would provide the wallets. Nobody would hold an account at Threadneedle Street. A holding limit would apply, set high enough, the Bank says, for day to day spending.
None of that is a decision to issue. The Bank has been consistent that a decision to proceed would trigger a further public consultation, then primary legislation, then a vote in Parliament. On the Bank’s own timetable, the earliest a digital pound could be issued is the second half of this decade.
The Governor’s objection
The difficulty is that the most senior sceptic works at the Bank. Speaking at the National Bank of Ukraine’s annual research conference in Kyiv on 20 June 2025, Governor Andrew Bailey set out a position he has not retreated from since.
“I remain to be convinced that we need to create new forms of money, such as Central Bank Retail Digital Currency, to achieve this,” he said. And more pointedly: “I am not against Central Bank Retail Digital Currency, but I question why it is needed if innovation proceeds as I think it should.”
His preferred route was explicit in the same speech. The buzzword, he said, is tokenised deposits, “really it is the application of digital technology to the form of money that we have today”, and “I do think commercial banks need to step up to the challenge of digital money provision.”
That is a conditional objection rather than a veto, and the condition is now largely satisfied. Which is the awkward part.
The alternative got built first
Sarah Breeden, the deputy governor who leads this work, used a City Week speech in May 2026 to describe the destination as a “multi-money system that promotes competition and choice between robust forms of money”, one in which “a pound is a pound, whoever issues it”. In that system, households pay with traditional bank deposits, tokenised bank deposits, regulated stablecoins and, she said, “potentially, a retail central bank digital currency”. The retail digital pound is the fourth item on a list, and the only one still awaiting a decision.
The other three have infrastructure and dates. RT2, the rebuilt core of the real time gross settlement system, had been live for a year by the time Breeden spoke. Settlement hours are on track to extend from 12 to 16 and a half each working day next year, with consultation under way on something closer to continuous operation. A synchronisation service that lets assets move conditionally against central bank money is targeted for 2028. The Bank now chairs a Retail Payments Infrastructure Board charged with designing the next generation of the rails that carry salaries and online banking. Sixteen firms, among them Euroclear, HSBC and London Stock Exchange Group, are preparing to launch in the Digital Securities Sandbox, which runs until January 2029.
The most consequential piece is the private money rulebook, and it is landing on almost exactly the same timetable as the CBDC decision. On 22 June 2026 the Bank published a policy statement and a draft Code of Practice for sterling systemic stablecoins. Comments close on 22 September 2026, ten days from now. The Bank intends to finalise the Code by the end of 2026, with regulated stablecoins able to operate from 2027.
The draft terms tell you how much residual nervousness there is. Each systemic stablecoin faces a temporary issuance guardrail, initially set at £40bn. Issuers may hold up to 70 per cent of their backing assets in short term UK government debt, with the remaining 30 per cent in central bank deposits. Bailey’s own test for private money in Kyiv was that it “must provide assurance of nominal value and pass the test of singleness of money”. The guardrail is what that test looks like when it is written down as a rule.
Why the verdict is harder than it looks
Parliamentary scepticism is not new. The Lords Economic Affairs Committee decided in 2022 that it had yet to hear a convincing case for a retail CBDC, and the Commons Treasury Committee thought so little had changed by 2023 that it titled its own report “The digital pound: still a solution in search of a problem?” Both wanted the Bank to keep asking why to do it rather than sliding into why not.
The trap is that the reverse question is now the live one. If tokenised deposits and licensed stablecoins carry a growing share of everyday payments, the singleness of the pound stops being a design assumption and becomes a supervisory workload, enforced coin by coin through caps, reserve rules and branding requirements. A digital pound is one answer to that, an anchor issued by the central bank and available to everyone. The rulebook published in June is a different answer, and a more laborious one.
So a decision to proceed would commit the Bank to years more work for an instrument its Governor has questioned. A decision not to proceed, or to hold the option open without building, leaves the Bank supervising a monetary system in which the anchor for retail payments is a set of conditions imposed on private issuers rather than a liability of the state.
Neither is a comfortable sentence to publish. Both will be in the assessment.
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