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HM Treasury (HMT) and the Bank of England (BoE) will launch a consultation during 2022 to evaluate the case for a central bank digital currency (CBDC) in the UK.
This review, by the UK economic and finance ministry and the central bank, will consider the high-level design features for a CBDC, the potential implications for users and business, and priorities for future development activities.
The 2022 consultation process will guide decisions on whether to introduce a CBDC in the UK and when to step into a development phase for this project, which is expected to last several years.
Following the consultation, a technical specification will outline the planned conceptual architecture for the CBDC.
The Bank of England and HMT launched a CBDC Taskforce in April 2021 to co-ordinate research on a potential UK CDBC. The BoE has also established engagement and technology forums, enabling industry stakeholders, academic specialists and civil society to provide strategic and technical feedback.
If the results of this development phase provide a green light for the CBDC, the earliest possible launch date is likely to be during the second half of the current decade.
The CBDC will provide a new form of digital money used for meeting everyday payment needs and will exist alongside cash and bank deposits, rather than replacing them.
Bank of England deputy governor for financial stability John Cunliffe says: “The plan to publish a consultation next year on CBDC is a crucial step in our policy department, especially as we further our thinking on the pressing issues at hand.
“What it will do is provide a platform for interested parties and relevant groups to engage with key questions on the merits of CBDC and whether the public sector should advance to a development phase.”
