In a recent announcement, the Bank of England (BoE) shed light on the process of digital Pound development. The bank is looking forward to onboard members advisory group as it proceeds in the next phase of developing central bank digital currency (CBDC).
On Wednesday, the BoE announced that it has set up a digital Pound advisory group as the nation gears up to enter the design phase for digital Pound. Currently, the BoE is recruiting members to fill positions into this advisory group.
Sources reveal that the BoE along with the British Treasury, which is the financial wing of the government, wants academics and researchers to express their interest in joining the group. The Treasury has also been playing a pivotal role in the overall development of nation’s CBDC.
Reportedly, the Academic Advisory Group in this case is meant to bring together experts across finance, economics, business and more. Through this move, the BoE intends to make the digital Pound viable for nation’s economic and finance conditions. The statement read:
Through this group, we seek to generate expert academic input and promote interdisciplinary discussions on a range of topics related to retail CBDC.
In February, the country launched a consultation on a digital Pound which the government and BoE believe is likely needed. That initial consultation closed in June. At the time, the officials said that a digital Pound could be launched by the second half of this decade to avoid fragmentation of an electronic cash system that is currently dominated by the world’s biggest tech and banking institutions.
As per the sources familiar with the matter, currently, the BoE plans to run its own experimentation and design phase over the next two years. Reportedly, it has also started asking stakeholders to respond to requests for information on use cases for offline payments and on what merchants will need from a digital Pound design.
In particular, the BoE has been very active with the development of CBDCs. Just last week, the Bank of England revealed that it aims to trial multiple ledger options, including blockchain, as it seeks to strike a balance between compatibility with distributed-ledger business models and the efficiency offered by conventional ledgers.
Simultaneously, the Bank for International Settlements’ London Innovation hub, in collaboration with the BoE, has successfully developed and tested a comprehensive suite of application programming interfaces (APIs) to explore the potential use cases and functionalities of over 30 central bank digital currencies (CBDCs), including offline payments.
To this, some lawmakers have also expressed their discontent and questioned why the BoE requires CBDCs. Lord George Bridges and Lord Michael Forsyth of Drumlean also warned against the idea of introducing a CBDC “by stealth.”
The lawmakers highlighted several topics of concern in CBDCs including privacy and criminal activity. These concerns resonate with the opposition that the digital Dollar and digital Euro have been facing in the United States and Europe respectively.