BoE published a discussion paper that focuses on the appropriate design of a central bank digital currency (CBDC) and an evaluation of whether the benefits of CBDC outweigh the risks. The discussion paper outlines an illustrative model of CBDC designed to store value and enable UK payments by households and businesses. BoE has outlined the key questions for further research at the end of this paper and requested feedback by June 12, 2020. BoE invites feedback and ideas from the public, technology providers, the payments industry, financial institutions, academics, and other central banks and public authorities.
BoE has not yet made a decision on whether to introduce CBDC and this discussion paper is part of that process. The paper is intended to be the basis for further research and dialog between BoE and the payments industry, technology providers, payments users, financial institutions, academics, other central banks, and public authorities. Anyone with an interest in these fundamental issues is encouraged to respond to BoE on the potential benefits, risks, and practicality of CBDC. The paper highlights that CBDC could present a number of opportunities for the way BoE achieves its objectives of maintaining monetary and financial stability. CBDC would also introduce important policy challenges and risks that need to be carefully considered and managed. The paper outlines an illustrative platform model of CBDC, designed to enable households and businesses to make payments and store value.
Choices around technology would have a major impact on the extent to which CBDC meets the overall objectives. Although CBDC is often associated with Distributed Ledger Technology (DLT), it is not presumed that any CBDC must be built using DLT and that there is no inherent reason it could not be built using more conventional centralized technology. However, DLT does include some potentially useful innovations, which may be helpful when considering the design of CBDC. Given the wide‑ranging implications of CBDC for the BoE objectives and the wider economy, any eventual decision to introduce a CBDC would involve Her Majesty’s government, Parliament, and regulatory authorities, in addition to engagement with society more generally.
Keywords: Europe, UK, Banking, CBDC, Digital Currencies, Fintech, Distributed Ledger Technology, Regtech, Blockchain, BoE
Previous ArticleAPRA Revises Implementation Approach and Timeline for APRA Connect
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
ECB published Decision 2021/752 to amend Decision 2019/1311 on the third series of targeted longer-term refinancing operations or TLTRO III.
The Central Bank of Ireland published Version 2.7 of the draft credit data template and rules for monthly AnaCredit reporting by banks.
OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.
EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.