Blockchain for Banking News

Bank of England, Treasury set up UK CBDC taskforce

pound digital currency

Today the Bank of England and HM Treasury jointly announced the creation of a taskforce to explore central bank digital currencies (CBDC). They emphasized that no decision has been made to proceed with a CBDC. 

A digital pound would be a third form of money alongside bank accounts and physical cash and what’s being investigated is a general CBDC available to businesses and consumers. Last year the Bank published a research roadmap on the topic.

The stated aims include exploring motivations, risks, use cases, and design features and keeping abreast of international CBDC developments.

While the Bank has already started to consult externally, a new CBDC Engagement Forum has been created. It will seek a diverse set of views including from financial institutions, merchants, businesses and consumers. At the same time, the taskforce is creating a CBDC Technology Forum.

Additionally, the central bank has created a CBDC unit headed by Deputy Governor for Financial Stability Jon Cunliffe, who also co-chairs the taskforce.

The announcement follows increasing levels of CBDC activities around the globe. In the West, Europe is now seen as the most likely to go first. In contrast, the Bank of England was one of the earliest to explore the topic.

At this stage, Asia is perhaps the most advanced because of the progress of digital yuan trialsCambodia’s live payment system, as well as Singapore’s Project Ubin and initiatives from the central banks of Thailand and Hong Kong.

Meanwhile, the Bank of England also announced a new omnibus bank account, a special account at the central bank targeted at regulated payment systems. The new account is well-suited to Fnality, the blockchain-based payment system owned by 15 institutions.

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