The Bank of England(BoE) and HM Treasury have announced to launch a CBDC task force to coordinate the exploration of a potential UK.
The Government and Bank of England have not yet decided whether to introduce CBDC in the UK. They will engage broadly with stakeholders on the benefit, risks, and practicalities of doing so. The Bank of England has also announced the creation of an Engagement Forum to get feedback on the non-technical elements of introducing a CBDC, and a Technology Forum to look at the technical challenges of building one.
British Finance minister Rishi Sunak responded to the HM Treasury announcement on Twitter by christening the effort with a one-word tweet, “Brticoin?”
CBDC would be a new form of money that would exist alongside cash and bank deposits, rather than replacing them. The government recognises that Cash remains very important to millions of people across the UK and has committed to legislating to protect assure to cash.
A CBDC unit has also been created within the bank of England specifically focused on the exploration of CBDC. It will work with other UK agencies and international authorities.
Taskforce ensures the strategic approach and promotes close coordination between, UK authorities as they explore CBDC. The bank said its work with the treasury would:
1. Coordinate exploration of the objective, use case opportunities, and risk of a potential UK CBDC.
- Agree to the principal reason for issuance to ensure that any decision to issue CBDC in the Long term strategic objective of CBDC includes how CBDC could promote innovation, inclusion, and competition in payments. Ensures a Joined-up contribution on that issues from across the UK authorities.
2. Guide evaluation of the design features a CBDC must display to achieve our goals
- Support clear, comprehensive, and prioritised articulation of requirements for CBDC, such as design features. Inform research into, and assessment of, design features to ensure that the benefits are suitably enabled and risks mitigated.
3. Support a rigorous coherent, and comprehensive assessment of the overall case for a UK CBDC.
- Give the Guidance of the development of the necessary framework for assessing the likely costs and benefits of the UK CBDC.
4. Monitor international CBDC development to ensure the UK remains at the forefront of global innovation.
- Input to the UK international work on CBDC to shapes outcomes.
A task force is co-chaired by the Deputy Governor of Bank of England, Jon Cunliffe, and HM treasury’s Director General of Financial Services, Katharine Braddick. Full membership of the Taskforce will be limited to relevant individuals from the Bank of England and HM Treasury. Other UK authorities will be involved in the Taskforce’s work on CBDC as appropriate.
The UK is one of a number of states currently exploring CBDC. Recently, Japan’s central bank launched the first phase of a feasibility study into a digital Yen.
