Bank of England on the digital pound
The Digital Monetary Institute hosted an in-person roundtable with the Bank of England on the digital pound last week. John Orchard, OMFIF’s chief executive officer, was joined by Shiv Chowla, senior manager for central bank digital currency at the Bank, to examine the considerations for a UK retail CBDC, published in a joint consultation paper with the UK Treasury.
Convening key public and private sector delegates from central banks, government, technology providers, commercial banks and other financial service practitioners, the discussion explored the important technological and policy architecture strategies for a digital pound.
The session kicked off with a comprehensive presentation from Chowla, outlining the motivations for and main features of the Bank’s proposal. These included design choices to meet future payment needs, the significance of preserving cash access for certain groups of people, the potential benefits that a CBDC could provide more widely and the implications for monetary policy and financial stability.
The Bank is promoting innovation, choice and efficiency in retail payments and is observing the evolving trends in declining cash use and new forms of digital money. Its ‘platform model’ for a digital pound received insightful contributions from the roundtable participants that acknowledged the role of a central bank core ledger, alongside technological intermediaries to interact with end users. The conversation moved onto the co-existence of a systemic stablecoin, interoperability and international payments and how the issuance of a CBDC could impact central bank money as an anchor for confidence in our monetary system.
We were pleased to be joined by the UK Treasury and other important voices for a robust conversation. With the UK accelerating progress in this space, the joint publication is open to responses until the middle of 2023 to help shape the direction of the project. As this work continues throughout the design phase, OMFIF looks forward to following up the conversation with future developments.
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