Main Points about Bank of England and CBDCs:
– Bank of England experiments with distributed ledger technology and wholesale CBDCs
– Wholesale CBDCs aim to improve speed and security of transactions for financial institutions
– Bank of England seeks public feedback on proposed approach for wholesale CBDCs
– Majority of central banks worldwide leaning towards issuing wholesale CBDCs in the medium term
Bank of England’s Approach to Wholesale CBDCs:
The Bank of England is conducting experiments with distributed ledger technology and wholesale CBDCs to enhance the payments landscape. Governor Andrew Bailey emphasizes the importance of innovation in money and payments, acknowledging both opportunities and risks associated with advancements in technology.
Challenges and Solutions for Wholesale CBDCs:
One of the key challenges for wholesale CBDCs is interoperability between different jurisdictions. To address this issue, the Bank of England aims to develop a synchronization interface that facilitates asset transfers between parties on external platforms while processing the cash leg of transactions on a real-time gross settlement platform.
Seeking Public Feedback on CBDCs:
To stay competitive in the global central banking sector, the Bank of England is inviting public feedback on its proposed approach for wholesale CBDCs. Despite the majority of central banks focusing on wholesale CBDCs in the near future, the bank is exploring various use cases and functionalities for these digital currencies.
