Estimated reading time: 2 minutes
On 14 January, the Bank of England and HM Treasury published an outline for a central bank digital currency (CBDC) blueprint, bringing the UK closer to a ‘digital pound’.
The design note outlined four key workstreams that will shape the future of Britain’s digital currency: product vision, scheme regulation, technology architecture, and operational framework.
The initiative envisions a public-private partnership model in which the Bank would build and operate the core infrastructure; regulated private firms would manage customer-facing services as payment interface providers (PIPs) and external service interface providers (ESIPs), accessing the core infrastructure via application programming interfaces (APIs)
This model is designed to encourage innovation whilst maintaining the Bank’s traditional role as guardian of monetary stability and encouraging commercial viability to the public.
The proposed framework would allow seamless exchange between the digital currency, traditional cash, and bank deposits.
The design phase includes extensive stakeholder consultation, with the Bank actively seeking feedback from financial institutions, technology firms, and civil society groups.
However, no final decision has been made on whether to proceed with implementation. Should the project advance, it would require parliamentary approval through primary legislation. The Bank estimates full implementation would take several years, with features being rolled out incrementally.
Central banks around the world are trialling digital currencies: the European Central Bank is progressing with its digital euro project, and China has already launched pilots for its digital yuan.
Source: Bank of England
