By Sarah Clark
The Bank of England has published a Blueprint framework describing the way in which a digital version of the British pound could be implemented.
Plans to launch a Digital Pound Lab this year have also been announced by the UK’s central bank.
The lab will provide a technology sandbox environment that will enable hands-on experimentation of innovative central bank digital currency (CBDC) use cases, potential business models for Payment Interface Providers (PIPs) and External Service Interface Providers (ESIPs), and API functionality testing.
The goal, the bank says, is to “provide a simulated environment to test the potential capabilities of a digital pound, offering critical insights into the feasibility of different use cases. This would help assess the feasibility of developing a digital pound as a platform for innovation.”
The plan to launch the Digital Pound Lab is included in the central bank’s latest progress update report.
“A digital pound, issued by the Bank of England, would be seamlessly exchangeable with cash and bank deposits, ensuring the continuity of a trusted, uniform and accessible means of payment,” the bank says in its report.
However, it adds, “no decision has been made on whether to proceed with a digital pound”.
“After completing the design phase over the next couple of years, including taking account of developments in the wider payments landscape, the Bank and Government will assess the policy case for a digital pound and determine whether or not to proceed.”
