CBDC (Central Bank Digital Currencies) seem to be popping up everywhere nowadays. We have observed central bank digital currencies being formed in the countries of Japan, Sweden, Australia, France and Brazil, for instance. While it is true that China is the leader when it comes to central bank digital currencies, even the United States itself has recently begun considering the possibility of introducing a digital dollar, although not everyone in the US seems to be on board with this idea as of the time of writing.
In related news, China has also stated the digital yuan is not meant to compete with the U.S dollar, as a response to what officials in the Biden administration had previously thought.
In the latest development, though, The United Kingdom seems to be going ahead with its plans to introduce its own CBDC. To this end, the Bank of England, alongside Her Majesty’s Treasury, have come together to announce the formation of a task force focused around the implementation of a CBDC in England.
U.K CBDC to complement existing methods instead of replacing them
It had been made known that the United Kingdom’s central bank digital currency shall be used for a variety of purposes. Additionally, the U.K CBDC shall be complementing the payment methods which already exist within the country, including but not limited to deposits and cash. In this way, a CBDC can be introduced smoothly without potentially replacing anything that the citizens have already become accustomed to.
As so much of the world is becoming increasingly digitised, it is no wonder that the United Kingdom wants to get more involved. An overwhelming amount of institutional and retail investors alike are now conducting their respective businesses and transactions online, and the continued popularity of cryptocurrency and blockchain technology has only exemplified this. It, therefore, makes sense for the country to introduce a CBDC as soon as possible.
CBDC task force is introduced
It should also be mentioned that while the country definitely has plans to introduce its own CBDC, the central bank has not completely made up its mind regarding the decision of actually launching it as of yet. For now, the central bank will be keeping a close watch on what other countries are doing in regards to digital currencies and related projects in a continued effort to ensure that the United Kingdom does not fall behind.
Also, the aforementioned task force will have the primary objective of coming up with the best approach from a strategic standpoint regarding the relationship between the relevant United Kingdom authorities and the process for a CBDC introduction. This is to be done whilst keeping the local laws in mind, as well as to ensure the promotion of tight-knit coordination between all parties involved.