Bank of England takes next steps in digital money plan

November 10, 2021 7:52 am

[Source: BBC]

The Bank of England and the Treasury are to launch a formal consultation on a UK central bank digital currency.

This evaluation of the design and possible benefits a new kind of digital money is a further step towards its possible creation.

The currency, for use by households and businesses, would sit alongside cash and bank deposits, rather than replacing them.

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No decision has been taken on whether to have such a currency in the UK.

But the consultation in 2022 will form part of a “research and exploration” phase and will help the Bank and government develop the plans over the following few years.

Central banks around the world are developing or exploring digital currencies after the rise of crypto-currencies such as Bitcoin.

China, for example, is a front-runner in this global race, and is in the process of testing a digital yuan in major cities including Beijing, Shanghai and Shenzhen.

Its next steps are to improve the eCNY currency’s privacy protections and to improve how it interacts with other payments tools, People’s Bank of China governor Yi Gang said on Tuesday.