The Bank of England and other entities would work with stakeholders as partners to assess the creation and development of a central bank digital currency (CBDC).
The UK began to work on creating a central bank digital currency (CBDC). The Bank of England, alongside HM Treasury, the UK government department responsible for developing and executing the UK government’s fiscal and economic policies, has created a task force to explore the possibilities of having a CBDC.
This news came from the Bank of England, which is the entity in charge of dictating the country’s monetary policy and officially the central bank of the United Kingdom. This news appeared to the public in a press release dated April 19.
According to the information, the CBDC would be a “new form of digital money” issued by the central bank for use by “households and businesses.” They also highlighted that cryptocurrency would exist alongside cash and bank deposits and do not plan to replace some money.
However, both authorities in the economic and monetary sphere highlighted that “they have not yet decided on introducing a CBDC in the United Kingdom”.
At the Gates of Innovation and Economic Evolution
With the creation of such a team, the UK central bank and HM Treasury will engage with stakeholders on the benefits, risks, and practicalities of a CBDC.
In this sense, the team’s primary goal is to assume a “strategic approach between the authorities”, promoting a more collaborative and inclusive space.
The group will invite technical experts and financial institutions, merchants, business users, civil society groups, and consumers to play more significant roles throughout this creative process.
The team will also assess the design features of a digital currency and monitor CBDC’s international developments to ensure that the UK “stays at the forefront of global innovation.”
UK Chancellor of the Exchequer Rishi Sunak presented CBDC’s proposal on Monday as part of a plan to enhance the European country’s competitive advantage. In this regard, Sunak commented:
“Our vision is a more open, greener and more technologically advanced financial services sector. The UK is already known to be at the forefront of innovation, but we need to go further. If we can catch the extraordinary potential of technology, we will consolidate the UK’s position as the world’s pre-eminent financial centre.”
As part of the country’s plans to create a more motivating environment, financial companies that adopt Blockchain technology will now access a digital Sandbox to improve the financial market infrastructure and consolidate their status as technologic companies.
The UK Financial Authority (FCA) will work in partnership with the Bank of England and HM Treasury to carry out this initiative and develop more projects shortly.
By: Jenson Nuñez
