Important points
- The Bank of England has launched a digital pound lab to experiment with central bank digital currencies.
- The initiative aims to modernize payments in the UK and create a public-private platform to assess the feasibility of introducing a digital pound.
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The Bank of England is launching the Digital Pound Lab, a sandbox environment to experiment with potential central bank digital currencies (CBDCs).
According to the BOE Digital Pound Progress report, the initiative aims to test potential use cases, business models, and technology designs through public-private collaboration.
No decision has yet been made regarding the introduction of the digital pound, with the current design stage focusing on assessing its feasibility. Any implementation would require parliamentary approval and primary legislation.
The World Bank stressed that the digital pound would guarantee user privacy and prevent both the Bank and governments from accessing personal financial data or controlling spending.
Over the past year, BOE has conducted experiments and investigated technical feasibility around APIs, e-commerce, offline payments, and privacy-enhancing technologies.
Digital Pound Lab fosters innovation while maintaining interoperability between digital pounds, cash and commercial bank money.
The Bank outlined key objectives for the retail payments ecosystem, including maintaining monetary unity, fostering innovation, ensuring infrastructure resilience and establishing effective governance.
These principles aim to support safe innovation, strengthen financial inclusion, and maintain public confidence in the monetary system.
BOE is committed to ongoing public consultation and stakeholder collaboration as part of the design phase. Digital Pound Lab helps refine potential CBDC blueprints through evidence-based decision-making and stakeholder input.
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