Other central banks are also looking at whether to set up digital versions of their own currencies, essentially widening access to central bank funds which only commercial banks can use at present.
This could speed up domestic and foreign payments and reduce financial stability risks.
Martin Bamford, chartered financial planner at Informed Choice, positively welcomed the Chancellor’s announcement.
Mr Bamford even suggested it could help the City of London, as it attempts to grow outside of the EU after Brexit.
He said: “I think the City of London is obviously looking at its place in the world right now.
“The City of London is known for its innovation already.”
The ECB’s Governing Council is exploring the possibility of issuing a new central bank digital currency (CBDC), a digital euro, in an attempt to respond to the accelerating trend toward digitisation in payments.
However, according to Mr Bamford, it could be politically damaging.
He said: “It would be a digital currency, alongside the euro.
“They have a currency system, which seems to work most of the time so I don’t think it would introduce any fresh problems.
“But it might amplify any sort of existing inefficiencies…”
The report shows that Europe’s citizens are in favour of a digital euro, but under a number of conditions.
The results show that citizens as well as professionals are in favour of such a development, provided that the Digital euro respects privacy (43 percent) and confidentiality of transactions and that it is sufficiently secure (18 percent) to prevent fraud.
They also support requirements to avoid illicit activities with fewer than one in ten responses from members of the public showing support for full anonymity.
This post originally appeared on Daily Express :: Finance Feed