Bank of England to launch UK CBDC consultation in 2022
The Bank of England has unveiled its next steps on delivering a central bank digital currency (CBDC).
The Bank, alongside HM Treasury, will launch a consultation in 2022 which will assess the case for a UK CBDC and outline what technologies need to be in place.
The consultation will research, explore and evaluate the benefits and implications for people and businesses if the UK were to adopt the digital currency, and will inform policy decisions over the coming years.
Still, no decision has been made on whether to go ahead with a CBDC in the UK, which would exist alongside cash and bank deposits, rather than replacing them.
In April, the Bank and HM Treasury set up the CBDC Taskforce, and the Engagement and Technology forums in which people from industry, civil society and academia have provided technical input.
Next year’s consultation will help inform the decision on whether to move into a development phase which will span several years and more details would be drawn up on what would be required from a technical standpoint.
At the conclusion of the development phase, and the case can be made for such a large national infrastructure project, then the Bank hopes a CBDC could be launched in the UK in the second half of this decade.
Economic secretary to the Treasury, John Glen, says: “I’d encourage everyone to contribute to the discussion so we can explore the opportunities this could bring, as well as understanding any risks it may pose.”
Deputy governor for financial stability, Jon Cunliffe, adds: “The plan to publish a consultation next year on CBDC is a crucial step in our policy development, especially as we further our thinking on the pressing issues at hand.”
Many countries have launched, or are exploring the use of, CBDCs in recent times. Nigeria’s central bank recently unveiled the eNaira and Bhutan partnered with Ripple to pilot its own CBDC.