The Bank of England (BoE) published a progress update on the digital pound and the payments landscape, reiterating that no decision has been made on whether to proceed with the central bank digital currency (CBDC).
After completing a design phase over the next couple of years, including taking account of developments in the wider payments landscape, the BoE and UK government will assess the policy case for a digital pound and determine whether or not to proceed. A digital pound would only be introduced with Parliament’s approval, requiring primary legislation, which would safeguard users’ privacy, guaranteeing that neither the BoE nor the government could access users’ personal information nor control how households and businesses use their money.
The digital pound design phase consists of four interconnected workstreams:
- Experiments and proofs of concept: focused experiments in collaboration with innovative private sector firms. These will establish the technological feasibility of different design choices.
- Blueprint: a proposed model and design of a potential digital pound which will form the basis for the assessment.
- National conversation: a program of engagement by the Bank and HM Treasury to ensure that work on a digital pound takes account of stakeholder views.
- Assessment: a framework to evaluate the costs and benefits of a digital pound, to inform the decision on whether or not to proceed to the build phase.
“Regardless of the assessment’s outcome, the design phase is expected to yield significant benefits for the UK fintech ecosystem,” the BoE wrote.