The Bank of England (BoE) and HM Treasury have jointly established a central bank digital currency (CBDC) taskforce to consider the possibility of a new form of digital money in the UK.
The new taskforce, which will be co-chaired by deputy governor for financial stability at the BoE Jon Cunliffe and HM Treasury’s director general of financial services Katharine Braddick, will engage with stakeholders on the “benefits, risks and practicalities” of introducing a CBDC in the UK.
If it was introduced, the UK digital currency would be issued by the BoE for use by households and businesses and would sit alongside, rather than replace, cash and bank deposits, the central bank confirmed.
In a statement, the BoE said: “The taskforce aims to ensure a strategic approach is adopted between the UK authorities as they explore CBDC, in line with their statutory objectives, and to promote close coordination between them.”
Among its objectives, the taskforce intends to monitor international CBDC developments to ensure the UK “remains at the forefront of global innovation” and will ensure that a “rigorous, coherent and comprehensive” assessment of the overall case for a UK CBDC is conducted.
The BoE also announced the creation of two new forums – a CBDC engagement forum and a CBDC technology forum – to help engage technical experts, and key stakeholders, including financial institutions, merchants, business users, civil society groups, and consumers, through the process.
In addition, a new CBDC Unit at the BoE will lead its internal exploration around CBDC, overseen by Cunliffe.