Bank of England, HM Treasury establish new taskforce to explore digital currency

The Bank of England and HM Treasury have jointly created a taskforce to explore a potential central bank digital currency (CBDC) in the U.K.

Announcing the news on Monday, the two government authorities said they have not yet decided whether to introduce a CBDC in the U.K. but will explore its use cases and risks.

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 fintechs, push the boundaries of digital finance and make our financial markets more efficient, will propel us forward.”

“And if we can capture the extraordinary potential of technology, we’ll cement the U.K.’s position as the world’s pre-eminent financial centre.” he said.

If issued, a CBDC would exist alongside cash and banknotes rather than replacing them, said the two authorities.

The CBDC taskforce 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 agencies will also involve other U.K. authorities as appropriate, they said.

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. The engagement forum would focus on non-technical aspects of a CBDC, such as its use cases, roles of public and private sectors in a CBDC system, and data and privacy implications. The technology forum, on the other hand, will focus on understanding the technological challenges of designing, implementing, and operating a CBDC. 

This is a breaking news story and will be updated…

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