Bank of England and HM Treasury Launch Taskforce for UK CBDC

Bank of England and HM Treasury Launch Taskforce for UK CBDC

This is the first sign of the Bank of England exploring the launch of a CBDC following the release of a discussion paper in March 2020.

• The Bank of England and HM Treasury have announced the launch of a taskforce to explore a potential UK central bank digital currency (CBDC).

• The UK central bank and government have not yet decided whether to launch a CBDC, so will use the taskforce to explore the practicalities of doing so, according to an announcement Monday.

• The Bank of England stated that a CBDC would not replace cash and bank deposits but exist alongside them.

• As part of the taskforce, two forums will be established, one focusing on engaging senior stakeholders and the other to gather input from the technology sector.

• Thus far, the Bank of England’s work on a CBDC has been limited to a discussion paper published in March 2020, so this is the first sign of any practical exploration taking place.

• The Treasury also announced today exploring how blockchain can improve financial market infrastructure in a new sandbox (a testing environment used to explore the application of certain technology in a safe and secure way). This will be delivered alongside the Bank of England and the Financial Conduct Authority (FCA).