In this episode of FRT, Tom Mutton, Director of Fintech at the Bank of England (BoE), discusses the Bank’s joint consultative report with HM Treasury (HMT), titled “The digital pound: a new form of money for households and businesses?” Tom additionally comments on the future of financial infrastructure, addressing privacy, interoperability, public vs. private solutions, and the future of decentralized technologies.
The consultative report, published on February 7th, 2023, was long-awaited by the industry following similar consultative documents on central bank digital currency issued by other jurisdictions in 2022. The additional time prior to publication of this report has allowed the BoE and HMT to consider feedback received by other jurisdictions to-date and produce a thoughtful response tailored to a potential digital pound. The report was overseen by the joint BoE-HMT CBDC Taskforce announced in April 2021 and was accompanied on February 7th by a Technology Working Paper that outlines the BoE’s emerging thinking on CBDC technology.
As stated, the working paper “explores technology design considerations which help to form a basis for the Bank’s current thinking on the technology requirements of a UK CBDC, and which will likely have significant impact on the design choices for CBDC. [The] paper also sets out an illustrative conceptual model, which is based on the platform model of CBDC. It outlines how different components of the conceptual model might operate and how ecosystem participants might interact with these components.” Responses to the consultative report are due on June 7th, 2023.