The Bank of England and HM Treasury are set to create a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential UK CBDC.
A CBDC would be a new form of digital money issued by the Bank of England and for use by households and businesses. It would exist alongside cash and bank deposits, rather than replacing them.
The government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, but say they will engage widely with stakeholders on the benefits, risks and practicalities of doing so.
The taskforce aims to ensure a strategic approach is adopted between the UK authorities as they explore CBDC, in line with their statutory objectives, and it will promote close coordination between them.
According to the bank, the taskforce will coordinate exploration of the objectives, use cases, opportunities and risks of a potential UK CBDC, and guide evaluation of the design features a CBDC must display to achieve their goals.
It will also support a comprehensive assessment of the overall case for a UK CBDC and monitor international CBDC developments to ensure the UK remains at the forefront of global innovation.
The co-chairs will be Jon Cunliffe, deputy governor for financial stability at the Bank of England, and Katharine Braddick, HM Treasury’s director general of financial services. As appropriate other UK authorities will be involved in the taskforce.
Meanwhile, the bank is also introducing two forums: the CBDC Engagement Forum, and the CBDC Technology Forum. The former will engage senior stakeholders and gather strategic input on all non-technology aspects of CBDC.
The bank says the forum will have an important role in helping the Bank and HM Treasury understand the practical challenges of designing, implementing and operating a CBDC.
Members will be drawn from financial institutions, civil society groups, merchants, business users and consumers.
The CBDC Technology Forum will engage stakeholders and gather input on all technology aspects of CBDC from a diverse cross-section of expertise and perspectives.
This forum is set to play an important role in helping the bank to understand the technological challenges of designing, implementing and operating a CBDC.
Members will be invited by the bank and drawn from a range of financial institutions, academia, fintechs, infrastructure providers and technology firms.
Lastly, the Bank of England has also announced it will establish a CBDC unit to lead its internal exploration around CBDC.
The unit will direct the bank’s external engagement on CBDC, including other UK and international authorities. The deputy governor for financial Stability, Jon Cunliffe, will oversee the work of the CBDC unit.
