The Bank of England has yet to make a decision on the feasibility of a central bank digital currency (CBDC), but it plans to make some progress on it this year. A senior executive at the bank said that while it may eventually pursue the CBDC, it would relegate the development of a retail CBDC wallet to the private sector.
While some like China, Nigeria and the Bahamas move at breakneck speed with their CBDC initiatives, England has taken a wait-and-see approach, similar to the United States. The central bank has said that it’s not opposed to a CBDC, which has been dubbed the Britcoin, but has said that it has no immediate plans to venture into its development.
In the latest update, the bank confirmed that it will launch a consultation which will set out the assessment of the case for a CBDC. This will encompass such issues as the merits and drawbacks of a Britcoin, what technology to employ, its effect on the national monetary policies and other such issues.
“This consultation will form part of a ‘research and exploration’ phase and helps to inform policy development over the next few years,” the bank said, adding, “No decision has been made on whether to introduce a CBDC in the U.K.”
The Economic Secretary of the Treasury John Glen commented that the consultation will open discussion for the role of a CBDC in the U.K. and called on all stakeholders to participate in the process “so we can explore the opportunities this could bring, as well as understanding any risks it may pose.”
Jon Cunliffe, deputy governor for financial stability at the bank, commented, “What it [the consultation] will do is provide a platform for interested parties and relevant groups to engage with the key questions on the merits of CBDC, and whether the public sector should advance to a development phase.”
While the decision on whether to proceed with CBDC development hangs on the balance, creating a CBDC retail wallet is out of the question, yet another top-ranking official has said. Katie Fortune, a senior executive at the bank’s CBDC unit said that wallet development will be delegated to the private sector.
Fortune also revealed that the Bank of England has yet to settle on whether it will build the CBDC on distributed ledger technology.
“That’s still a really open question for us. It’s not taken as a given that it is built on a blockchain, it’s not taken that it’s not,” she added.
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