Bank of England considers creating digital currency

The UK Chancellor, Rishi Sunak, has announced a top-level taskforce to explore the benefits, risks and challenges of creating a Central Bank Digital Currency (CBDC). The taskforce will leverage experts from both the Bank of England (BoE) and HM Treasury to look into the new form of digital money for use by households and businesses. Rather than considering this CBDC as an alternative to existing money from the BoE, it will be designed to exist alongside traditional cash and bank deposits.

In addition to considering the factors mentioned above, it will be important to monitor international CBDC developments, so the UK can be at the forefront of this growing financial movement. Two new forums will be created to aid in consultation regarding the UK's CBDC; one for senior stakeholders and concerned with practical use-cases, another more focussed on the underlying technologies. Furthermore, the BoE will establish a CBDC Unit overseen by The Deputy Governor for Financial Stability.

Talking about the plans, Sunak opined that a new CBDC could help put the City of London "at the forefront of innovation and to take advantage of regulatory freedom after Brexit," reports The Guardian. The chancellor also expected these digital currency developments to "boost growing fintechs, push the boundaries of digital finance, and make our financial markets more efficient".