Bank of England governor denies Farage sway over digital pound policy

Bank of England Governor Andrew Bailey has denied that lobbying by Nigel Farage swayed the central bank’s approach to a potential digital pound, insisting that policymaking at Threadneedle Street remains insulated from outside political pressure. The denial, contained in a letter obtained by The Guardian and reported on Wednesday, comes as the Reform UK leader faces separate scrutiny over undisclosed gifts from individuals linked to the crypto industry.

Bailey wrote that the Bank is “able to spot” attempts to influence its policymaking, addressing coverage that followed a meeting with Farage at which cryptocurrencies were among the topics discussed. “Following our meeting, Mr. Farage spoke with the press outlining that we had discussed a range of topics, including cryptocurrencies,” Bailey wrote, according to the report. “I am happy to confirm that no policy changes have taken place as a result of interventions by Mr. Farage.”

A test of central bank independence

The episode lands at a sensitive moment for the Bank’s governance credentials. Farage, a prominent Brexit campaigner and outspoken critic of central bank digital currencies, resigned his parliamentary seat this week amid reports that he accepted “gifts” from individuals with ties to crypto. He has previously said he would “rather go to prison” than accept what he characterises as a system of financial surveillance under a digital pound.

Despite stepping down, Farage has maintained his innocence, telling followers in an X livestream that he has “not broken the law in any way at all”. The Guardian also reported on Wednesday that the UK’s National Crime Agency is investigating several transactions involving other senior Reform UK figures over suspected money laundering, broadening the scope of scrutiny beyond Farage himself.

For a central bank navigating both a live CBDC consultation and a politically charged debate over financial privacy, the appearance of independence carries as much weight as the substance of any policy decision. Bailey’s letter appears designed to draw a clear line under any suggestion that private meetings with lobbyists — however prominent — can be shown to have altered the Bank’s regulatory trajectory.

Digital pound work proceeds in parallel

The Bank continues to describe the digital pound as a project still in its design phase, with no commitment yet to a launch. “No decision has been made on whether to introduce a digital pound,” the central bank has said in a recent update, stressing that any move to introduce one would require further analysis and public consultation before implementation.

Separately, the Bank earlier this year launched a six-month pilot examining how tokenised assets could be settled using central bank money, a project involving 18 companies as part of its wider effort to modernise the UK’s financial infrastructure. That workstream, distinct from the retail digital pound debate, underscores that institutional experimentation with tokenisation continues regardless of the political noise surrounding CBDC design.

For UK and European market participants, the episode is a reminder that CBDC policy sits at the intersection of monetary technocracy and populist politics, with the credibility of the Bank’s independence now itself a subject of public debate alongside the substance of the digital pound project.

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