The Bank of England plans to carry out a series of experiments on a wholesale CBDC and distributed ledger technology. In a discussion paper, the BOE says it will also experiment to ensure that the “singleness of money” is maintained with stablecoins and tokenized deposits.
The Bank of England has been designing and working on a CBDC Digital Pound for some time. In 2022, the Bank for International Settlements (BIS) and the BOE jointly initiated Project Rosalind. The primary objective of this project was to assess the viability and potential benefits associated with introducing a Central Bank Digital Currency in the United Kingdom.
“Confidence in money and payments is fundamental to the Bank’s responsibility for monetary and financial stability,” Governor Andrew Bailey said in the introduction to the discussion paper on Tuesday. “As innovation in this space continues, our role must also evolve, to support a robust and dynamic U.K. economy.”
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The Bank of England says it will work with the Treasury, Payments Systems Regulator, and the Financial Conduct Authority to ensure the singleness of money is maintained even when stablecoins are involved. It will carry out a series of experiments to ensure that the singleness of money is maintained between stablecoins and tokenized deposits. Tokenized deposits are deposit claims represented on programmable platforms.
The Bank is welcoming responses to the proposal by its own clients, making sure all are on board for the CBDC project.