Bank of England and HM Treasury Launch Taskforce for UK CBDC

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).

See also: A Digital Euro Must Protect Privacy, ECB Public Survey Reveals