• The Bank of England and the UK Treasury are consulting on a digital pound, a U.K. Central Bank Digital Currency (CBDC).
• If implemented, the digital pound would supplement cash in circulation and could be accessed through digital wallets offered by private companies.
• Ripple’s technology is mentioned as part of two projects – a DLT proof of concept and a cross-border synchronization project – that may enable private sector innovation for the CBDC.
Digital Pound Consultation
Yesterday, the Bank of England and the UK Treasury published a consultation paper on the digital pound, a U.K. Central Bank Digital Currency (CBDC), with an aim to gather public opinion this year and implement it in the second half of this decade if approved.
Purpose Of A Digital Pound
The digital pound would serve as an additional payment method for households and businesses alongside cash already in circulation. It would be stored directly at the Bank of England, but users would access it via digital wallets offered by private companies.
Ripple Technology Involvement
Ripple’s technology is mentioned under “Enable private sector innovation” in connection with RTGS (Real-Time Gross Settlement). This includes two projects: one DLT proof of concept project worked on with Baton Systems, Clearmatics Technologies Ltd, R3 and Token; another cross-border synchronization project done jointly with Ripple which demonstrated synchronised FX transactions in two different simulated RTGS systems can be achieved successfully leading to incorporation of synchronisation functionality into renewal roadmap.
Private Sector Innovation
As part of its renewal program for RTGS service, the central bank is focusing on strategies to benefit new types of private sector companies via innovative technologies like those used by Ripple. This includes developing new structures that will bring more efficiency to payments while also ensuring safety standards are met.
The consultation paper provides insight into why a Central Bank Digital Currency is being considered for U.K., what it might look like if approved and how Ripple’s technology may play an important role when it comes to enabling private sector innovation for its implementation.