Based on a Cointelegraph post, the UK is not yet ready to create a central bank digital currency (CBDC), according to a deputy governor, since the Bank of England (BoE) lacks the necessary infrastructure.
BoE deputy governor John Cunliffe stated during the treasury select committee hearing on February 28 that there is a more than 50% probability that the Bank of England will issue a CBDC, but the regulator doesn’t have the technological know-how to do so now.
Cunliffe stated that the BoE anticipates acquiring the necessary knowledge to proceed with the CBDC development in the following stage and that the central bank intends to test a future digital pound with partners from the business sector.
“But to move to the next stage, which would be to build a working prototype, to test in a simulated environment and then you’d be into testing in a live environment, then implementation. This next phase aims to put us in a position to do that,” according to the deputy governor.
Cunliffe emphasized that depending on the goals of the CBDC, the design and structure of a possible digital pound would differ substantially. Providing digital cash, or the digital equivalent of BoE notes, for “general payment purposes” would certainly be BoE’s primary aim in this situation. He also added: “We didn’t want a system in which there were two forms of Bank of England money circulating, remunerated and unremunerated. And also, we didn’t want a system where we would be producing something which would have the characteristics of a savings product.”
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