Bank of England CBDC Would Take ‘Several Years’
A senior UK Government member has admitted a retail central bank digital currency (CBDC) for the country may not arrive until the second half of this decade.
While confirming it will take ‘several years’, John Glen, Economic Secretary to the Treasury, also sounded a note of caution about whether a UK CBDC will even go ahead.
The UK is actively exploring the potential for a retail central bank digital currency to complement to cash and bank deposits.
If it proceeds, it would be a new form of digital money, denominated in Sterling and issued by the Bank of England, for everyday payment use.
Delivering UK CBDC Would Require Lots of Work
In early 2021, the UK Chancellor of the Exchequer created a taskforce to explore a retail central bank digital currency and moves to engage stakeholders including consumer groups, businesses and tech experts. The intention is to ensure UK authorities approach consideration of a CBDC in a coordinated way.
So far, no decision has been taken, and more consultation is due to start next year.
Delivering an update on the project, Mr Glen said: ‘Exploring and delivering a UK CBDC, if there were a decision to proceed, would require carefully sequenced phases of work, which will span several years.
‘HM Treasury and the Bank of England will publish a consultation in 2022 setting out their assessment of the case for a UK CBDC, including the merits of further work to develop an operational and technology model.
‘If there is a decision to proceed following the consultation, a development phase would include the publication, by the Bank of England, of a technical specification to explain the proposed conceptual architecture for a UK CBDC. This development phase could involve in-depth testing of the optimal design for, and feasibility of, a UK CBDC.’
Liaising with International Partners
This could then lead to a build and testing phase, but Mr Glen warned : ‘Given the scale and national importance of such a project, this phase would likely take several years and could involve the development of large-scale prototypes and live pilots.
‘Were the results of each of these phases to conclude that the case for CBDC were made, and that it were operationally and technologically robust, then the earliest date for launch of a UK CBDC would be in the second half of the decade.’
The UK Government will also liaise with international partners on the global implications of any such move.
Author: Moni Talks
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