As part of its quarterly report, the Bank of England published a thoughtful paper on how the digital pound can become a tool to spur innovation. More importantly, how to design a central bank digital currency (CBDC) to achieve that goal.
It outlines four ways of spurring innovation, including technology, new markets, data and standard setting.
Naturally the central bank is unlikely to come up with a ground breaking technological innovation. That’s not its mandate. However, its actions could encourage tech adoption, and it specifically mentions distributed ledger technology (DLT) as one possibility and privacy enhancing tech (PET) as another. It also believes innovation is enhanced by supporting open source software.
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