Tom Mutton, the director of FinTech at the Bank of England (BoE), has disclosed why the central bank might explore alternatives to blockchain as the underlying technology of its CBDC program.
In an interview with Bloomberg UK, Mutton noted that a significant debate arose regarding the choice of ledger for the central bank digital currency (CBDC) at a recent technologists’ gathering organized by the Bank of England (BoE) to discuss the digital pound’s architecture. He noted that the bank aims to experiment with different ledger systems, including blockchain technology.
In addition to the ledger technology debates, Mutton also addressed the privacy aspects of the central bank digital currency (CBDC). He emphasized that the digital pound’s design would prioritize user privacy and ensure that no personal data is collected. According to Mutton, both the Bank of England (BoE) and the government will not have access to user data in the context of the central bank digital currency (CBDC). The bank would only be aware that transactions have occurred without the knowledge of the individuals behind those transactions. The wallet provider, on the other hand, would have access to the user’s data but not their specific transaction data.
The BoE had previously stated that the digital pound and private stablecoins could coexist, particularly in the retail sector. This suggests that the CBDC and privately issued stablecoins could operate simultaneously, serving different purposes and target markets.
The Bank of England (BoE) is reportedly planning to hire approximately 30 workers to bolster its CBDC division. The roles to be filled include programmers and engineers, solution architects, and security experts. These recruits will contribute to the development, feasibility, security, usability, and regulatory compliance of the digital pound.
The concept of a digital pound, also known as Britcoin, took shape through the collaboration between the Bank of England (BoE) and the UK Treasury Department in April 2021. The BoE published a consulting paper in February 2023, outlining the framework for the digital pound.
Currently, the BoE and the UK Treasury are actively seeking feedback and insights on the proposed design of the central bank digital currency (CBDC) from various stakeholders and technical experts. The comment period will remain open until June 30, 2023, providing an opportunity for interested parties to contribute their perspectives.
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