DailySun
The Bank of England is set to introduce a sandbox for testing a potential central bank digital currency (CBDC) or a government-issued digital pound.
On January 14, the BoE released a progress report detailing possible applications for a CBDC, proposed business models, and a roadmap for the testing phase centered around blockchain-based payment systems. The project, called “Digital Pound Labs,” is scheduled to launch this year, with the goal of fostering collaborations between governmental entities and private sector financial institutions.
The Bank emphasized the necessity of involving both domestic and global stakeholders to pinpoint issues within current payment systems that a digital pound or CBDC could potentially resolve.
To facilitate this, the BoE announced the discontinuation of its Technology Forum, which previously functioned as a platform for gathering public and institutional feedback. Going forward, the Digital Pound Lab will adopt a more hands-on approach, collaborating closely with the Academic Advisory Group and the Engagement Forum as part of the bank’s consultation framework.
No final decision on the UK CBDC
Additionally, a digital pound would need the approval of the U.K. Parliament, followed by further public consultations prior to establishing primary legislation. Lawmakers had previously expressed caution regarding CBDCs in June 2023 after the central bank hinted at a sovereign digital currency back in February.
No decision has been reached regarding the advancement of a digital pound. Following the design phase over the next few years, while considering the broader payments landscape developments, the Bank and Government will evaluate the policy rationale for a digital pound and decide whether to move forward or not.
BoE progress report
