The institutional adoption of cryptos continues, as the Bank of England (BOE) just announced the start of a twelve-month research project, in coordination with the Massachusetts Institute of Technology (MIT).
According to the bank’s announcement the research would aim to clear out the potential challenges, opportunities, and risks associated with the designing of a central bank digital currency system. In order to complete the research, BOE would join forces with the Digital Currency Initiative (DCI) team in the Media Lab of MIT.
“The collaboration forms part of the Bank’s wider ‘research and exploration’ into CBDC and will be focused on exploration and experimentation of potential technology approaches. This work is focused on exploratory technology research and is not intended to develop an operational CBDC,” Bank of England added.
A national approach to CBDCs
This is the latest institutional push towards understanding and adopting central bank digital currencies. Earlier in March, the Bank of Canada also joined forces with MIT for CBDC research.
However, both Canada and England would come a long way before implementing any type of national crypto. In contrast, countries like Kenya, Korea, and Jamaica have already taken the lead in the global CBDC ecosystem, with the Bank of Korea completing the first phase of CBDC testing.
The European Union and cryptos
The EU also voiced its decision to delve into the research and development of CBDCs, as back in July 2021, the European Central Bank (ECB) announced that it has launched the investigation phase of the Digital Euro project to address key issues regarding the design and distribution of the Digital Euro.
However, just a few months after the CBDC research phase initiation, European lawmakers decided to put a widespread ban on proof-of-work blockchains, such as Bitcoin’s.
The MiCA redesign
The Markets in Crypto Assets (MiCA) regulation framework sparked a wave of concern in crypto enthusiasts, as some of the legislations proposed a widespread ban on proof-of-work as a consensus mechanism for blockchains.
The pressure pushed regulators to ditch the PoW ban and continue the discussions without adding it to the final version. The actions now lie in the votes of Europe’s parliament, council, and commission, in order to reach a final consensus to establish region-wide regulatory provisions.
The negotiation phase between European policymakers should begin this week, with subjects such as non-fungible tokens (NFTs) and decentralized finance (DeFi) as the main topics.