UK’s central bank to explore digital currency

Quick Take

  • The Bank of England has officially announced that it will explore potential use cases for central bank digital currencies
  • The BoE has formed a group with five other central banks and the Bank for International Settlements
  • The group will “assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability”

The Bank of England (BoE), the U.K.'s central bank, has officially announced that it will explore potential use cases for central bank digital currencies (CBDCs).

The BoE has created a group with five other central banks - the Bank of Canada, the Bank of Japan, the European Central Bank, the Sveriges Riksbank (Sweden) and the Swiss National Bank - to explore CBDCs, according to an announcement published Tuesday.

The group will be overseen by the Bank for International Settlements (BIS) and will be chaired by Benoit Coeure, head of the BIS Innovation Hub, and Jon Cunliffe, deputy governor of the Bank of England.

The BIS set up the hub last June to encourage international collaboration on innovative financial technology within the central banking community. The Swiss National Bank later signed an operational agreement with the BIS to open the hub in the country to research a blockchain-based digital currency.

The group of six central banks and the BIS will now “assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies,” per Tuesday's announcement. 

The group will also closely coordinate with the relevant institutions and forums – in particular, the Financial Stability Board and the Committee on Payments and Market Infrastructures (CPMI), said the BoE. 

Digital currencies 

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