On Tuesday 9 November, the UK HM Treasury and the Bank of England announced next steps on the exploration of a UK Central Bank Digital Currency (CBDC). CBDC would be a new form of digital money issued by the Bank of England which would exist alongside cash and bank deposits.
In 2022, HMT and the Bank will launch a consultation which will set out their assessment of the case for a UK CBDC, including the merits of further work to develop an operational and technology model for a UK CBDC. It will evaluate the main issues at hand, consider the high level design features, possible benefits and implications for users and businesses, and considerations for further work. This consultation will form part of a ‘research and exploration’ phase and help to inform policy development over the next few years.
Deputy Governor for Financial Stability, Jon Cunliffe, said: “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. What it will do is provide a platform for interested parties and relevant groups to engage with the key questions on the merits of CBDC, and whether the public sector should advance to a development phase.”