Digital Assets: The U.K. Makes Exploratory Moves Towards CBDC

April 19, 2021 | Digital Assets, News

The Bank of England and HM Treasury will set up a task force to explore a central bank digital currency (CBDC).

The Bank of England and HM Treasury today announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential UK CBDC. However, in a statement, the Bank said no final decision has been made on whether to launch a CBDC in the U.K., and that the Bank and the Government would “engage widely with stakeholders on the benefits, risks, and practicalities of doing so.”

The CBDC would be a new form of digital money issued by the Bank to be used by households and businesses. It would complement cash and bank deposits rather than replacing them.

The Bank announced the creation of four bodies in respect of the CBDC:

Task Force

The roles of the task force in respect of a potential CBDC would be:

  • Evaluate objectives, use cases, opportunities, and risks
  • Evaluate design features
  • Make the overall case to support a CBDC
  • Keep an eye on international CBDC developments

Bank of England: CBDC unit

A new division of the Bank, the CBDC unit will coordinate the internal and external functions relating to the potential CBDC.

CBDC Engagement Forum

This forum will engage senior stakeholders and gather strategic input on all non-technology aspects of CBDC.

It will help the Bank and HM Treasury understand the practical challenges of designing, implementing and operating a CBDC.

CBDC Technology Forum

This forum will engage stakeholders and gather input on all technology aspects of CBDC.

It will help the Bank of England understand the technological challenges of designing, implementing, and operating a CBDC.

Chancellor Rishi Sunak

Speaking at a financial industry conference, the chancellor said the CBDC task force was being set up as part of a range of measures designed to boost the City following Britain’s departure from the EU.

Related Story:  Bank of England Mulling CBDC

Image Credit: Flickr                                                   

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