Her Majesty’s Treasury and the Bank of England have unveiled the creation of a central bank digital currency task force (CBDC). According to the announcement, the group’s goal is to explore a potential UK CBDC.
UK entities are calling on a CBDC task force to investigate a central bank-issued digital currency
Central bank digital currencies (CBDCs) are popping up in a number of countries and most are still in the exploration phase. A few countries like Venezuela, Sweden and China are way ahead of the game compared to countries like the US, Canada and the UK. On Monday, the HM Treasury and the Bank of England (BoE) released an announcement indicating that they plan to compete in the CBDC race.
The two UK entities have set up a CBDC task force as the Treasury says the group will focus on “exploring a potential UK CBDC.” The press release wants to inform the public that bureaucrats and the BoE “have not yet made a decision on the introduction of a CBDC in the UK”. However, the task force is intended to take a strategic approach to the idea and “promote close coordination” between officials investigating a UK-based CBDC.
The CBDC Task Force is co-chaired by Jon Cunliffe, the Deputy Governor of the Bank of England and Katharine Braddick, HM Treasury’s Director General of Finance. “Full membership of the task force is limited to relevant individuals from the Bank of England and HM Treasury,” the announcement said. “Other UK authorities will be involved in the work of the Task Force on CBDC as appropriate and invited to meetings as needed. The Bank of England and HM Treasury will jointly provide secretarial services, ”said the Treasury’s announcement.
A CBDC will ‘secure the UK’s title as a world leader for fintech innovation’
In a note to Bitcoin.com News, Jorge Lesmes, Global Head of Blockchain Banking Practice at Everis believes the recent announcement from the HM Treasury and BoE is positive. “The UK is a world leader in fintech, and the implementation of a Central Bank Digital Currency (CBDC) would help secure this title,” explains Lesmes. “As the Covid-19 pandemic accelerates our transition from physical fiat and increases customer interest in convenient, technology-driven access to financial services and digital payments, the introduction of a CBDC would be key to meeting these evolving demands of the industry. consumers, ”he says. added.
The Everis manager continued:
However, the first stage of implementation is likely to come with commercial banking, for interbank settlements, before retail banks take advantage of the use of a digital currency. The introduction of a CBDC is of course not without risks. For this partnership to succeed, the newly created Task Force must examine how the UK government will operate alongside the Bank of England, to ensure that all potential risks have been considered and that the right regulations are in place to eradicate threats and add value. preserve.
Members of the HM Treasury and BoE plan to evaluate design features to achieve specific goals. The CBDC needs a “rigorous, coherent and comprehensive assessment”, emphasizes the Treasury. Both entities will also participate in contacts with CBDC stakeholders. In addition, the organizations will monitor CBDC developments to ensure that the UK “remains at the forefront of global innovation.”
What do you think of the efforts of the HM Treasury and BoE introducing a CBDC task force for the UK? Let us know what you think about this topic in the comments section below.
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