Bank of England\'s CBDC Design Phase Gains Momentum: Exploring the Digital Pound

The potential for a UK Central Bank Digital Currency (CBDC), often referred to as the digital pound, is gathering pace as the Bank of England (BoE) moves forward with its design phase. This critical stage will inform future decisions regarding the feasibility and architecture of a digital currency for the UK.

This progress comes after significant collaborative efforts, including Project Rosalind, jointly initiated Last year by the Bank for International Settlements (BIS) and the Bank of England (BOE). The primary objective of this project was to explore the technical challenges and opportunities associated with a CBDC.

In the design phase, the Bank will conduct experimentation which will inform an evaluation of the technology feasibility of CBDC and help to determine the optimal design and technology. This rigorous approach aims to establish a solid foundation for any potential future implementation.

A key focus is ensuring the design aligns with the needs of the UK economy and its citizens. An effective design phase will ensure that the development of a digital pound can be accelerated if a decision is taken to build it.

The Bank of England actively encourages open discussion and research on the digital pound. This group aims to encourage academic research and debate surrounding the potential benefits and risks of a CBDC.

While progress is being made, 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 introduce a digital pound. The design phase is crucial for gathering the necessary evidence to inform any future policy decisions.