Dion Seymour comments on the prospect of a digital pound in AccountingWEB

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Crypto & Digital Assets Technical Director, Dion Seymour, discusses the prospect of a digital pound and the difference between a potential digital pound and existing cryptoassets, in AccountingWEB.

Dion’s comments were published in AccountingWEB, 09 February 2023.

“The development of a UK CBDC (termed Britcoin in some quarters of the press) has been on cards for a while now with the Bank already making a number of previous announcements (and appointments). The publication of the consultation paper (and technical paper) does give some indication of travel although the Bank of England and HM Treasury are keen to stress that no decision has been made yet.

“But what could this mean for tax and accounting? The starting point is that a CBDC is NOT the same as cryptoassets such as Bitcoin. These are two completely different things. A CBDC will, essentially, be issued by a central bank and, in many ways, the same as the money in your bank account (commercial money). Therefore, from that perspective, existing legislative and accounting frameworks should accommodate a CBDC (unless any provision is aimed specifically at physical cash) without too much concern.

“However, whilst a CBDC should effectively be akin Sterling for legal (and tax and accounting) purposes, the bigger challenge remains in terms of how the CBDC is implemented. For example, whilst we note that the Government wants to ensure privacy and will not “program” the money, it remains unclear what, if any, safeguards will be put in place to ensure that and prevent others from doing the same (from which the government indirectly benefits).”

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