City of London response to UK gov on CBDC

Thi is interesting reading because of the efforts they go to skirt around "bitcoin already does this" while repeating bitcoin benefits (banking the unbanked, inclusion, speed of settlement, etc).

If these talking points become the "accepted benefits" then a "fair comparison" will reject CBDCs because of the instabilities.

This is the text: https://www.irsg.co.uk/assets/Responses/TSC-Crypto-Asset-Inquiry.pdf

Here are some points i picked out (the last point about encouraging innovation in mining is interesting, UK has a lot variable wind power -- some times negative pricing -- but horrendous consumer energy prices):

The introduction of a new set of arrangements such as CBDCs, distributed ledger technology and smart contracts represents a big shift from traditional arrangements making their adoption in established financial markets a higher risk proposition as a result of the lack of certainty in the legal and regulatory analysis of such new arrangements

... adequate focus should be placed on upskilling staff within government and regulators to be able to keep up with digital innovation, including crypto. There is a strong drive within industry to upskill in this space, and it is recommended that regulators follow suit.

HMRC published a consultation earlier this year looking to expand the list of “investment transactions’” which are allowed to benefit from the investment management exemption (IME) to include cryptoassets

The use of anti-money laundering regulation as applied to crypto has generated some concern within industry. Forcing crypto into ill-fitting existing regulation that was not designed for this new technology risks hindering its adoption by the market and risks the UK’s capacity to become a global centre for this sector.

Nonetheless, recent studies have shown miners are increasingly turning to more sustainable sources of renewable energy21 – “on average 39% of proof-of-work mining is powered by renewable energy, primarily hydroelectric energy. Understanding the energy source of mining is important because electricity costs account for the majority of hashers’ operational expenditures - albeit with some variability across world regions - and hashers have long competed on accessing the cheapest energy source”. Policy makers should encourage implementation of energy efficient consensus mechanisms, as well as encourage innovation in this space.