Her Majesty’s Treasury and the Bank of England have announced the formation of a Central Bank Digital Currency Working Group (CCDC). According to the statement, the group wants to explore the possibility of a UK CBDC.
UK agencies form CBDC task force to investigate loss of digital currency to central bank
Central bank digital currencies (CNDs) are developing rapidly in a number of countries, and most are still in the testing phase. Countries like Venezuela, Sweden and China are ahead of countries like the United States, Canada and the United Kingdom. On Monday, the UK Treasury and the Bank of England (BoE) announced that they would be joining the CBDC race.
Two UK bodies have set up a CBOCR working group to study the possibility of a UK CBOCR, the Treasury said. The press release wants the public to know that the bureaucrats and the Council of Europe have not yet made a decision on the introduction of CBDC in the UK. Nonetheless, the working group aims to take a strategic approach to the idea and promote close coordination between officials exploring the establishment of CBDCs in the UK.
John Cunliffe, Deputy Governor of the Bank of England, and Catherine Braddick, Director General of Financial Services at the UK Treasury, will co-chair the CBOCR working group. The working group will consist exclusively of relevant individuals from the Bank of England and the UK Treasury, the announcement said. Other UK authorities will participate as appropriate in the work of the NRA working group and will be invited to attend meetings. The Bank of England and the UK Treasury will share the role of secretary, according to the ministry’s announcement.
CBDC will consolidate the UK’s position as a world leader in innovative technologies.
In a note to Bitcoin.com News, Jorge Lesmes, head of Everis’ global blockchain banking practice, calls the recent announcement by HM Treasury and Exchange Bank positive. The UK is a world leader in fintech, and the launch of the Central Bank Digital Currency (CBDC) would help secure that title, Lesmes said. With the Covid 19 pandemic accelerating the shift away from physical scarcity and increasing customer demand for convenient and technological access to digital financial services and payments, the implementation of CBDC will be critical to meeting these changing customer needs, he added.
Executive Director Averis continued:
However, the first phase of implementation is likely to take place at the commercial bank, for interbank settlement, before the retail banks can benefit from digital money. Of course, the introduction of CBOCR is not without risks. If this partnership is to succeed, the newly formed working group will need to consider how the UK Government will work with the Bank of England to ensure that all potential risks have been considered and that the right regulations are in place to deal with threats and preserve value.
Members of HM Treasury and the BoE intend to assess design features to achieve certain objectives. The Ministry of Finance calls for a thorough, consistent and comprehensive review. Both entities will also engage with CBD stakeholders. In addition, the organisations will oversee CBDC to ensure that the UK remains at the forefront of global innovation.
What do you think of the efforts of the Treasury and the Council of Europe to establish a CBDC working group in the UK? Let us know what you think in the comments below.
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Bank of England, BoE, BoE CBDC, CBDC stakeholders, central bank for digital currency, crypto, digital assets, Everis, fintech, HM Treasury, John Cunliffe, Jorge Lesmes, Catherine Braddick, taskforce, Treasury, United Kingdom
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