In a technical paper issued for consultation in February, the Bank of England set out limits on individual holdings to prevent a run on commercial banks and dismissed blockchain as a viable technological option.

“We judge that a limit of between ?10,000 and ?20,000 per individual is likely to strike an appropriate balance between managing risks and supporting wide usability of the digital pound,” states the paper.

UK Finance, which represents 300 banks and fintechs, has questioned the viability of the proposed model and is pressing for a lower limit of ?5000 to avoid panic and deposit flight. This would be more in line with the European Central bank’s proposed ceiling of between EUR3000-EUR4000 for a digital euro.

The lobby group also warned that a digital currency could provoke concerns over priavy and state interference, adding that UK authorities are yet to lay out “clearly what objectives and needs the digital pound is expected to meet and why it is best suited to meet those needs. It is not clear from the consultation what place in the market digital central bank money is expected to take”.

The UK Treasury and the central bank are still exploring potential use cases of a CBDC, with the final decision being expected by 2025.