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The UK Is Joining Sever Other Countries, Looking To Develop Digital Currencies In The Future

The Bank of England (BOE) and Her Majesty’s Treasury (HMT) agreed on having a formal consultation in 2022 for a possible CBDC launch. The two institutions would gather on a series of events, aiming to decide whether the nation would move forward with a possible central bank digital currency (CBDC).

The proposed CBDC project aims to a new form of digital money issued by the Bank of England and for use by households and businesses for their everyday payments needs while coexisting with fiat and deposits.

Both parties agreed to jointly enter a "research and exploration" phase, which will identify the main problems, the design elements, benefits, and use cases in both retail and institutional payments.

John Glen, Economic Secretary to the Treasury, noted that a retail CBDC would benefit people and businesses based in the UK by providing a fast and reliable way of making everyday payments.

"This consultation will begin an open discussion on the role a UK central bank digital currency might play in the UK. I’d encourage everyone to contribute to the discussion so we can explore the opportunities this could bring, as well as understanding any risks it may pose.” Glen added.

According to BOE, the development of the CBDC project would take at least several years. Furthermore, a technical specification would aid in the architectural framework for UK’s CBDC project.

However, there is still no final decision on whether to introduce a CBDC in the UK, which would be a major national infrastructure project, according to the bank. The earliest date for a working pilot program is scheduled for 2025, while some experts are even considering 2030 as a possible launch date for UK's digital pound.

The BOE and UK’s Treasury are working side by side since April 2021, when the BOE and HMT started the joint CBDC Taskforce to coordinate the development of a potential UK CBDC.

The Bank also developed the Engagement and Technology forums, where stakeholders and interested entities from industry, civil society, and academia provide strategic and technical input to the work on CBDC.

The news about the CBDC come amid nations like China are on the final stretch into launching their own CBDC project, dubbed DC/EP. Furthermore, El Salvador and several other countries decided to either incorporate cryptocurrencies as legal tender or construct their own means of digital payments.

The CBDC launch comes amid a bullish month for the crypto sector. For instance, Bitcoin’s lowest point over the past 30 days was 54,370.97, only to reach an all-time high of $68,530.34 on November 9. The rest of the crypto sector acted in sync with the crypto leader, recording double-digit price increases, with only a few exceptions.

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