The Bank of England said they would be limited to £20,000 for the digital currency, which will be released soon. Britain's government also said that the Bank for England had been pressing on with work as possible ahead of the release of its first digital currency.

"We propose a limit of between £10,000 and £20,000 per individual as the appropriate balance between managing risks and supporting wide usability of the digital pound," said Cunliffe in a speech.

He also explained that this limit means that ¾ of people can use this pound. Meanwhile, if digital pounds are set to a limit of £20,000, this will allow almost everyone to use digital pounds for day-to-day transactions. 

Money above the cap would be swept into a customer's commercial bank account, which means that the digital pound does not have substantial storing wealth.

"At the end of the day, you could say I need a little wallet full of internet cash to buy things on Amazon," said Cunliffe. And this study also proves that central banks worldwide have started studying digital currencies with the potential to use digital euros in May.

What is the Digital Pound, and When Will the Bank of England Release This Digital Currency?

Previously, the Bank of England had announced plans to release a digital pound. Digital governor Jun Cunliffe gave a speech on plans to update the finance industry about the plans for central bank digital currency (CBDC), the future currency.

Instead of creating a CBDC, the central bank will still hold and issue this currency. Wholesale CBDCs will be used for payment processing between central and retail banks. At the same time, some CBDCs are used for central banks and everyday individuals.

"The Bank and the Treasury will now proceed to the next stage of detailed policy and technical development of the digital pound," said Cunliffe and predicted that all of these interests would be resolved within three years.

The Bank of England Asks Not To Call The Digital Pound A Britcoin Because It Is Not A Crypto

The release of the Digital Pound could mean many things. On the positive side, this will improve financial inclusion, in which a digital pound could make it easier for unbaked or underbanked people to gain access to financial services. 

This will also increase efficiency. Greater efficiency in the digital pound relates to universal credit payments. According to the essence of this currency, this will vastly reduce the costs and time associated with traditional banking transactions.

These two positive aspects will be directly related to the improved monetary policy. A digital pound could make it easier for the Bank of England to implement monetary policy. 

The Bank of England will also more easily provide direct control of the supply of money circulation. Meanwhile, the cons of the digital release of the British pound mean increased cybersecurity risks.

Privacy concerns are also things that cannot be forgotten. A digital pound could compromise the privacy of individuals by allowing central banks to track their transactions. Disruptions of traditional baking systems are also the most worrying thing. 

The rollout of a digital foundation could displace intermediary banks or other financial institutions. And lastly, this will also give rise to new political and regulatory risks for the future financial system.

Thus, this also makes the Bank of England say that this currency is not worthy of being called Crypto. He mentioned that the mention of Crypto would only increase the risk of this currency. In addition, England's finances are also considered to be less resistant.

Bank of England Deputy Governor Jun Cunliffe said that the British central bank will try to release this digital currency in 2025. But they have been trying to measure all the pros and cons for a while, so the target is released in 2025.