The Treasury and the Bank of England (BoE) have suggested that a state-backed 'digital pound' is likely to be launched this decade.

Both the Treasury and the Bank said that the public should have access to 'safe' digital money that can be used easily.

A central bank digital currency (CBDC) would use similar technology to cryptocurrencies, but the digital pound would be 'less volatile', according to the BoE.

Andrew Bailey, Governor of the Bank of England, said:

‘As the world around us and the way we pay for things becomes more digitalised, the case for a digital pound in the future continues to grow. A digital pound would provide a new way to pay, help businesses, maintain trust in money and better protect financial stability.

‘However, there are a number of implications which our technical work will need to carefully consider. This consultation and the further work the Bank will now do will be the foundation for what would be a profound decision for the country on the way we use money.’

A consultation has been launched on how the CBDC would work.