The UK’s finance ministry together with the Bank of England are discussing the possibility of the launch of a Central Bank Digital Currency (CBDC). The launch is being planned for 2022. The Bank of England announced that its ongoing consultations for the launch of a digital pound included features of design, advantages and its potential impact for users and businesses.
Consultative Process
The outcome of the consultations will determine the final decision on the rollout of the CBDC. The Central Bank went on to announce that if the consultations and discussions yield a positive outcome, the CBDC would be launched in the second half the decade.
The bank further clarified that no decision on the issue has yet been taken. The bank added that even if the digital pound is indeed introduced, it will not replace existing currency. Rather, the digital pound will exist alongside the existing cash arrangement and bank deposits.
The Bank of England and the Finance Ministry have established a task force to examine the various issues associated with the introduction of the CBDC. The task force will examine the design of the CBDC and the implementation of the roll out – should it be decided to go ahead with the rollout of the CBDC.
The ministry further added that its officials would also be consulting experts on any reforms that would be required to accompany the introduction of crypto assets and stable coins.
While none of the world’s leading economies have launched a CBDCD yet, many are exploring the idea. China has rolled a digital Yuan on a trial basis in several regions of the country. The Chinese central bank reported that there were more than 140 million accounts with digital currency holdings.
