A formal consultation on a UK central bank digital currency will be launched by the Bank of England and the Treasury.
This assessment of the design and potential advantages of a new type of digital money is a step closer to its development. The currency, which would be used by both individuals and companies, would complement rather than replace cash and bank deposits.
In the United Kingdom, no decision has been made on whether such a currency should exist. However, the 2022 consultation will be part of a “research and exploration” phase that will assist the Bank and government in developing strategies over the next few years.
Following the advent of crypto-currency like Bitcoin, central banks all around the world are establishing or investigating digital currencies.
China, for example, is a worldwide leader in this race and is already developing a digital yuan in key cities such as Beijing, Shanghai, and Shenzhen. The next stages, according to People’s Bank of China governor Yi Gang, are to strengthen the eCNY currency’s privacy safeguards and how it interacts with other payment systems.