UK CBDC Taskforce Established

The Bank of England and the UK’s Treasury have created a taskforce to coordinate the exploration of a potential UK Central Bank Digital Currency (CBDC). The announcement was at pains to explain that this was not intended to replace cash and bank deposits and that the UK has not made the decision whether or not to introduce a CBDC.

The role of the taskforce is to work at a strategic level. A parliamentary committee has recently criticised the management of cash in the UK, which currently sits across five different government bodies. Perhaps as a result, one of the roles of this taskforce is to promote close coordination across UK authorities.

The taskforce has two co-chairs, one from the Bank of England and one from the Treasury’s Financial Services department – Jon Cunliffe, the Bank’s Deputy Governor for Financial Stability and Katharine Braddick, Director General of Financial Services respectively. Jon Cunliffe will chair a new Division within the Bank set up to handle its internal work and its external engagement with other parties in the UK and overseas.

A CBDC Engagement and a Technology Forum have been set up. The Engagement Forum will look at all non-technology aspects around the design and operation of a CBDC. Examples given were addressing inclusion and privacy implications. Both forums will seek input from a wide range of parties and experts.

The taskforce has four areas of work:

• Exploring what a CBDC might do along with the opportunities and risks it brings, the goal being to 'promote innovation, inclusion and competition in payments and support a thriving UK economy'.

• Guide the evaluation of the design of the CBDC, including the resolution of 'tradeoffs' required between different priorities attached to particular design features.

• Ensure that the assessment of the case is 'rigorous, coherent and comprehensive', including the costs and benefits involved.

• Monitoring what is happening internationally so that the UK can be at the forefront in this area, including representing the UK at G7 and G20 meetings.