Last updated on January 20th, 2022 at 04:21 pm
On 9 November 2021, the UK government announced the next steps in its exploration of a potential Central BoE Digital Currency (CBDC) for the UK.
In a joint statement, the UK’s Ministry of Finance (HM Treasury) and the UK’s central bank (the Bank of England (BoE)) set out plans to launch a public consultation in 2022. That consultation will include their assessment of the merits of issuing a UK CBDC, and whether further work is required to “develop an operational and technology model for a UK CBDC”. Further, the consultation
“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.
The UK government was keen to stress that “no decision has been made on whether to introduce a CBDC in the UK”.
Earlier in 2021, the BoE and HM Treasury initiated the joint CBDC Taskforce to coordinate the exploration of a potential UK CBDC, including stakeholders to gather the views of industry, civil society and academia.
It is worth noting that even if the consultation in 2022 results in a decision to develop a CBDC, the UK government expects the actual development work to take several years. As such, it doesn’t expect to launch a CBDC until after 2025 at the earliest.
Finally, the UK expects any CBDC to co-exist alongside cash and BoE deposits, rather than replacing them.
