The U.K. government will bring forward a consultation on the case for a central bank digital currency "in the coming weeks," Chancellor of the Exchequer Jeremy Hunt said.

The Bank of England will also release a paper setting out technology considerations informing the potential build of a digital pound, Hunt said in a written statement to Parliament. Hunt announced the plan as part of a wider set of reforms to spur the U.K.'s financial services industry.

BOE officials led by Deputy Governor Jon Cunliffe have become increasingly vocal about the need for so-called central bank digital currencies, or CBDC, which would give consumers and businesses a form of money that's as safe as cash but usable in online transactions.

They note a sharp drop in the use of cash is leaving money increasingly controlled by private companies that don't have the explicit government guarantee carried by banknotes and coins.

However, a U.K. parliamentary panel said earlier this year that officials have given no convincing reason it is needed. The House of Lords Economic Affairs Committee.

The group, which includes former BOE Governor Mervyn King, said at the time that the project might threaten the stability of the banking system and inject the BOE into controversial debates on privacy. One concern is that it could allow the state to have greater surveillance of people's spending choices.

Joe Mayes reports for Bloomberg News.

Copyright 2022 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.