The Bank of England is planning to launch a digital pound lab this year. In collaboration with HM Treasury, the bank aims to create a legal framework for a central bank digital currency ( CBDC ), which must be approved by parliament.
The lab will function as a sandbox for real API testing. CBDC and study modern payment models. The main objective is to involve private sector participants and stimulate technological and functional progress.
It so happens that extensive public participation, including surveys and focus groups, has revealed problems with current payment systems. These have not been publicly identified, but the new initiative is intended to address operational shortcomings and create practical solutions.
The lab will evaluate specific use cases and analyze technological and operational feasibility. The results of the experiments will be used to create a potential digital pound project.
The bank plans to release design notes detailing its views on various elements of the digital pound, which will form the basis of discussions with stakeholders.
In addition, the Bank will monitor emerging trends in payments systems, private sector innovation, the use of cash, developments in the UK payments infrastructure and relevant global developments.
