BoE’s Bailey rejects Farage influence on digital pound

Bank of England Governor Andrew Bailey wrote that Nigel Farage’s lobbying did not affect the central bank’s work on a possible digital pound, and that no policy changes followed their meeting.

In a letter after the meeting Bailey wrote the Bank is “able to spot” attempts to influence policymaking and confirmed that “no policy changes have taken place as a result of interventions by Mr. Farage.” The two discussed several topics, including cryptocurrencies.

Farage resigned his parliamentary seat this week after reports he accepted gifts from people with links to the crypto industry. He denies wrongdoing and told an X livestream he has “not broken the law in any way at all.” He has criticised central bank digital currencies and has said he would “rather go to prison” than live under what he described as a system of financial surveillance.

Separately, the National Crime Agency has opened inquiries into transactions involving other senior figures in Farage’s Reform UK party over suspected money laundering. Those inquiries are independent of the Bank of England’s digital currency work.

The Bank of England is continuing research on a proposed “digital pound” and says the project remains in the design phase. The Bank has stated that “No decision has been made on whether to introduce a digital pound” and that any launch would require further analysis and public consultation.

Earlier this year the Bank ran a six-month pilot to test how tokenized assets might be settled using central bank money. Eighteen firms took part. The project formed part of the Bank’s wider effort to modernise the UK’s financial infrastructure and explore how central bank money could operate in digital markets.

A central bank digital currency would be a digital form of central bank money intended to sit alongside cash and bank deposits. Policymakers are studying what role such a currency might have while payments and financial services move further online and tokenization technology develops.