Report said that the United Kingdom is the latest country to begin exploring the possibility of creating a central bank digital currency (CBDC).
It has been reported that the Bank of England (BoE ) has begun preliminary central bank digital currency studies that could result in the creation of a national digital currency. In a document published by HM Treasury, the exchequer announced the creation of a CBDC task force in collaboration with the United Kingdom’s central bank.
Sir Jon Cunliffe, the Deputy Governor of the Bank of England, and Katharine Braddick, the Director-General of Financial Services at HM Treasury, will co-chair the task force. However, according to the terms of reference document, the task force will synergize the efforts of all relevant statutory bodies in the UK regarding CBDC development. As part of its duties, the task force will explore preliminary issues associated with the design, implementation, and operation of a CBDC in the United Kingdom.
The U.K. enters the CBDC race with the creation of a joint task force to explore the creation of a sovereign digital currency. https://t.co/mCFk2Dkih2 — Cointelegraph (@Cointelegraph) April 19, 2021
The task force will also interface with stakeholders across academia, fintech, and other relevant industries to identify the technological hurdles involved in creating a sovereign digital currency.
However, the joint HM Treasury and BoE task force will also monitor CBDC-related developments on the international scene, especially as other nations are actively exploring their own central bank digital currency projects.
A BoE press release issued that the central bank will also run its own internal CBDC unit headed by Cunliffe.
Likewise, the establishment of the task force is yet another indication of the U.K. government’s focus on digital currencies and fintech in the aftermath of Brexit. In November 2020, Rishi Sunak, Chancellor of the Exchequer, said that Brexit offered an opportunity for the UK to revamp its financial services sector. Since Brexit, Sunak has overseen a significant policy shift toward harnessing novel fintech innovations like a CBDC and stablecoins.
UK financial services minister John Glen has identified stablecoin regulations as the major focus of the government in the area of cryptocurrency regulations.
According to a report by Reuters, the UK’s financial market focus is also extending toward distributed ledger technology firms.
Thus, Sunak announced that the government plans to establish a fintech sandbox for blockchain startups.