British businessman and economist Neil Record has described the United Kingdom’s digital pound initiative as an “ill-fated venture” due to a lack of customer demand. Record argues that the digital pound, in its current form, is not appealing to customers in the U.K. because many of its touted benefits are already provided by regular bank accounts.

In a recent op-ed, the economist asserts that the Bank of England (BOE) initially felt the need to create the digital pound because it was spooked by the dramatic decline in cash use. From accounting for 51% of all payments made in 2013, the proportion of cash payments had dropped to 12% by 2023.

According to Record, the BOE feels threatened by this decline, as it could lead to a reduction in cash holdings. In a world where cash is rarely used, the economic model on which central banks like the BOE are predicated would be damaged. In the BOE’s case, its existence as an “independent” central bank would be challenged, he said.

However, Record believes the digital pound initiative is likely to fail because customers may not want the government scrutinizing their finances.

“There are other reasons why customers might not choose to use the digital pound. Most people regard the Bank of England as part of the government. They might be suspicious that the Bank would not be able to protect their privacy, and hence that the government would, in theory, be able to discover their intimate financial affairs,” Record said.

The economist also highlighted the BOE’s confirmation that the digital pound would not be based on blockchain technology as another reason why customers would avoid it. After spending $30.5 million on the project, Record hopes the BOE, which he said has not had a good decade, will abandon the initiative and “return to its core remit of inflation control and sensible financial regulation.”

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