A consortium of businesses from within the payments industry is launching a CBDC pilot to support the development of a digital pound.
Paywithglass is working with The Payments Association and the Boston Consulting Group to conduct a pilot for a UK CBDC with the aim of providing a design sandbox to the Bank of England and wider industry. The two year pilot scheme will test a privately issued digital settlement asset in order to explore design principles for a UK CBDC, a project dubbed Britcoin, and assess its potential impact on the financial sector.
At a launch event today, attended by UK lawmakers, regulators and industry heavyweights, Kunal Jhanji of Boston Consulting Group said that the consortium hopes the pilot will “help inform the policy agenda going forward.”
“It’s time to take note of the activities happening globally and decide the UK’s position in a CBDC environment or multi CBDC environment. We think now is the time to have that informed debate one way or the other,” said Jhanji.
The pilot comes as the Bank of England and HM Treasury prepare for a joint consultation on the development of a UK CBDC. While the pilot scheme will not feed directly into the consultation, the consortium intends to present its findings and results to regulators with the aim of providing technology solutions and modelling to inform the creation of a UK CBDC.
Proposals to develop Britcoin are currently facing pushback from lawmakers, with a House of Lords committee recently issuing a damning report which said there was “no convincing case” for the creation of a digital verison of the pound. The Economic Affairs Committee report warned that an electronic pound would raise privacy concerns for consumers, threaten commercial banks and expose the payments system to the risk of technical failures