The Bank of England and Her Majesty’s Treasury have jointly created a task force to explore a potential central bank digital currency in the United Kingdom. Announcing the news on Monday, the two U.K. government authorities said they have not yet decided whether to issue a CBDC in the country but will explore its use cases and risks.
The task force will evaluate design features of the CBDC.
They will also evaluate the design features of a CBDC and monitor international CBDC developments to ensure the U.K. “remains at the forefront of global innovation.” “Our vision is for a more open, greener, and more technologically advanced financial services sector,” said the country’s finance minister Rishi Sunak. “The steps I’ve outlined today, to boost growing fintech, push the boundaries of digital finance, and make our financial markets more efficient, will propel us forward.” As part of digitalizing financial services, firms exploring blockchain technology will also access a new sandbox to improve financial market infrastructure.
CBDC would not replace cash and banknotes.
If issued, CBDC would exist alongside cash and banknotes rather than replacing them, said the two authorities. The task force will be co-chaired by Bank of England’s deputy governor for financial stability Jon Cunliffe and HM Treasury’s director general of financial services Katharine Braddick. The two government agencies will also involve other U.K. authorities as appropriate, according to the announcement. The Bank of England appears to be all in on CBDC. It has also created a new CBDC unit, a CBDC engagement forum, and a CBDC technology forum. The CBDC unit will lead the central bank’s internal and external coordination around potential digital currency. Central banks around the world are currently working on digital currencies to ward off the competition from decentralized cryptocurrencies.