Britcoin to be trialed on multiple ledgers, including blockchain: Bank of England

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The Bank of England (BoE) will trial a digital pound on multiple ledgers, including blockchain, the head of the project at the BoE has revealed. In a recent interview, Tom Mutton talked about privacy features for the digital pound, the role of cash in a central bank digital currency (CBDC) era, and more.

BoE has been studying the feasibility of a digital pound for years but has yet to commit to developing it. A decision on whether to move forward with the project will be made around 2025, Mutton told Bloomberg. The decision would involve the BoE, Parliament, and “a wide range of stakeholders.”

“If we were to build [the CBDC], then we think the end of the decade would be the earliest point at which one might be available for people to use,” he said.

A digital pound is unlikely to be deployed on a public ledger, Mutton added. He pointed to challenges facing public ledgers, including scalability, security, and governance.

“But we’ll certainly experiment with it; we can’t rule it out.”

BoE joins several other central banks who have ruled out public blockchains as a CBDC ledger under the belief that they can’t scale and are not secure or stable enough. However, the BSV blockchain has proven it can scale to accommodate enterprise needs, notching over 86 million transactions in a day.

While it has yet to launch, the digital pound is already facing skepticism and opposition from several stakeholders, including bankers and legislators. Mutton told Bloomberg that this skepticism stems from a misunderstanding of its utility. Britcoin won’t replace cash, nor will it invalidate the role of commercial banks.

“We’d focus on keeping the money safe and providing the infrastructure, and the private sector would focus on providing great user experience…a digital pound is about providing choice, not crowding somebody out or disintermediation,” Mutton said.

Another key concern is privacy: many people fear that central banks will use CBDCs for financial surveillance. Mutton dismissed these fears, saying that the BoE doesn’t intend to access any financial data from digital pound users.

“We’ll know what transactions have happened, but we’ll have no idea what person did them. The wallet provider from the private sector will know who the person was, but not what the transactions were.”

The BoE has been collecting public feedback on the CBDC since February. Earlier this month, it extended the deadline to June 30 to accommodate additional questions on whether and how non-residents should access the digital pound.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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