As plans to launch central bank digital currencies (CBDCs) across different countries are still ongoing, Her Majesty’s Treasury and the Bank of England have jointly launched a task force to explore the feasibility of creating a CBDC.
According to an official press release on April 19, the BoE is yet to decide on whether to issue a CBDC and that is why the task force was created—to explore its use cases, associated risks, and determine the suitable design.
The task force would work with both local and international agencies to ensure the outworking of the project.
The bank also announced that it has created a CBDC Engagement Forum, which would cater to the non-tech aspect of the CBDC, and a CBDC Technology Forum, which would oversee the technical aspect of digital currency creation.
Once the project is approved, the UK’s digital currency would serve as a complement to other existing payment methods, not a replacement.
A CBDC would be a new form of digital money issued by the Bank of England and for use by households and businesses. It would exist alongside cash and bank deposits, rather than replacing them, the bank stated.
The Taskforce is also aiming to monitor the CBDC development projects of several other foreign countries “to ensure the UK remains at the forefront of global innovation on digital currencies.”
Currently, China is at the forefront of CBDC development, intending to create a digital yuan that could help improve financial systems in the country, curtail the threat of cryptocurrencies, and accelerate cross-border payments.
Several economies exploring the possibility of launching a CBDC are paying close attention to China’s digital yuan project, hoping to get a few pointers from there to enable them to do things right.
Speaking of doing things right, a few weeks ago, ECB’s president, Christine Largade, noted that the bank is taking its time to ensure that every step is carried out to a T, adding that it might take another four years before it rolls out a CBDC.