UK’s Bank of England Moves Closer to Launching its CBDC

Paigambar Mohan Raj
Source: The Cryptonomist

The Bank for International Settlements (BIS) and the Bank of England (BOE) launched Project Rosalind last year. The aim of the project was to examine the feasibility and potential advantages of a Central Bank Digital Currency (CBDC) in the UK.

A year later, the project concluded that the technology could allow a “diverse range” of new ways to use money. The first round of the experiment’s report revealed that a CBDC may facilitate payments between people more quickly and easily. It might also allow businesses to reduce fraud and develop new financial solutions. Additionally, it can enable the “programmability” of money.

The first round of Project Rosalind’s findings strengthens the UK bank’s argument for starting its own CBDC, dubbed “Britcoin.”

However, this begs the question as to…

When will the UK launch its CBDC?

Gilbert Verdian, CEO of the blockchain technology company Quant, stated the UK’s present monetary system “is not fit for purpose for a digital society.”

Since last year, Quant has been working on a retail CBDC prototype. Eight participants from the banking and large tech industries tried using Quant’s underlying blockchain architecture during the project’s initial phase.

A CBDC debit card was developed by Mastercard. Cash-on-delivery payments have been tested by Barclays Plc. Here, funds are paid to a vendor once deliveries are received in satisfactory condition. Meanwhile, a CBDC checkout has been tested by Amazon UK.

According to Verdian, the invention of a multi-party lock payment has been the project’s most significant result yet.

The BOE will not make a decision regarding the technology until it has reviewed the feedback from a consultation that will end at the end of June. The UK Treasury’s support is also necessary.

Verdian recognized that many of the CBDCs that had already been introduced in other nations had not been particularly successful. He claimed that the Bahamas Sand Dollar’s technology wasn’t robust enough, which resulted in frequent outages of the currency. Because customers couldn’t perceive the advantages, Nigeria’s attempt at CBDC didn’t gain any traction.

Some have criticized the Bank of England for pursuing a CBDC without providing a thorough explanation of the advantages. Lord Mervyn King, a former BOE governor, described it as a “solution without a problem.”