Bank of England Explores Digital Pound for Wholesale Markets – CBDC Adoption on the Rise?
A Bank of England (BoE) official has said that a digital version of the British pound could soon be used in wholesale markets, potentially taking the UK one step closer to a central bank digital currency (CBDC).
The comments about a digital pound were made by Bank of England Deputy Governor for Financial Stability Jon Cunliffe, who in a speech on Monday called it a “misunderstanding of the Bank’s position” to assume that policy makers were considering CBDCs only in a retail context.
According to a transcript of the speech, Cunliffe said:
“We recognize very clearly the potential transformative effect on wholesale financial markets of tokenization of financial assets, atomic settlement, smart contracts and other emerging technologies.”
He added that a bill now under consideration by the Parliament will allow the central bank to set up a regulatory sandbox that developers can use to “explore ideas like collapsing trading and settlement into an instantaneous smart contract.”
Further in the speech, the BoE’s Deputy Governor explained that one way to go about this is for the central bank to tokenize its reserves – what it calls “wholesale money” – and to develop a ledger system for transferring these tokens between participants in the wholesale market.
“We, like other central banks have been exploring such options,” he said.
Cunliffe’s comments are not the first time Bank of England officials have indicated that a CBDC could be launched in the UK.
Back in February this year, a news report said that a digital version of the pound was in the plans for the country, and that it could launch “later this decade.”
The Bank and the Treasury will create a road map to “potentially introduce a new central bank currency,” the report said at the
Read more on cryptonews.com
