The finance ministry is due to set out proposals for making Britain’s capital market more attractive after Amsterdam toppled London to become Europe’s top share trading centre after the City was cut off from the European Union during the super soarway Brexit.
CityUnited Chairman Daniel Hodson said there is now a “swelling majority” in the City that believes it was better to focus on making the financial sector more competitive rather than delaying change in the hope of getting EU access.
“A central bank digital currency (CBDC) should be a fundamental foundation for a competitive City after Brexit, otherwise China will steal a long march on us”, Hodson said.
China is planning to put its digital yuan to use at the 2022 Winter Olympic Games in Beijing.
“The Bank of England is talking about a CBDC but it ought to be a greater priority as this form of technology is the future, and would bring other benefits like real-time regulation to cut costs”, Hodson said.
To be fair, CityUnited hates Europe and all who sail in her. It was founded by eurosceptic politicians and City veteran Hodson, a former chief executive of London’s futures exchange.
They have given their ideas to a UK government taskforce set up by Prime Minister Boris Johnson in the hope that some “freedoms” obtained from Brexit might lift growth.
A digital pound would allow fractions of a currency to be spent and traced without costly overheads to help collect and distribute taxes in real time, and spawn more efficient, real-time supervision of markets, CityUnited said.
Regulators should also be required to maintain the attractiveness and openness of UK markets, and foster the development of “parallel markets” for trading euro-denominated products outside the bloc for international investors, it added.