Bank of England enters the era of central bank digital currencies
The Bank of England Explores Central Bank Digital Currencies
The Bank of England (BoE) is embarking on a series of experiments with Central Bank Digital Currencies (CBDCs) with a focus on retail usage. The institution has decided to swiftly engage in the rapidly evolving payment sector, thus preparing for the consequences arising from innovations. In addition to CBDCs, the central bank plans to utilize Distributed Ledger Technology (DLT) within the conducted experiments.
Objective and Scope of the Experiments
The Bank of England’s experiment program will be based on a specific set of policy objectives that the institution aims to achieve through introducing innovation in the area of central bank wholesale money. The synchronization would allow two separate settlement ledgers to communicate and exchange information, contributing to efficient earmarking of funds and payment execution.
Collaboration and Regulations
The Bank of England plans to closely collaborate with the government, the Payment Systems Regulator, and the Financial Conduct Authority within the conducted experiments. The goal is to ensure the possibility of exchanging different forms of currency, both digital and traditional, between various entities.
The “Britcoin” Project – Digital British Pound
The Bank of England has been exploring the possibilities of implementing a Central Bank Digital Currency at least since February. In April, formal consultations began to develop suitable regulatory frameworks for the potential introduction of a CBDC for the UK. The new digital currency could be named “Britcoin,” “Digital British Pound,” or “Digital Pound.”
Expansion of the Project Team
In order to strengthen the Central Bank Digital Currency project, the Bank of England decided to increase the team responsible for this area by 30 new employees in April. This decision reflects the seriousness and commitment of the institution to the development and analysis of the potential introduction of the digital pound in the British market.
