The Bank of England (BoE) has initiated a pioneering approach in its central bank digital currency (CBDC) endeavors by convening an Academic Advisory Group (AAG) comprising experts from diverse fields. As the BoE transitions into the design phase of its CBDC initiative, the newly established AAG is poised to provide specialized insights on topics spanning policy, law, economics, innovation, competition, finance, and industrial organization, among others.
While the BoE has been deliberating on a CBDC for a considerable span, it has not yet committed to its development. However, the institution has engaged in a series of feasibility studies, positioning itself to embrace digital currency creation should it opt to proceed.
Collaboratively overseen by the BoE and H.M. Treasury, the AAG is envisaged as a conduit for robust discourse, offering the government an avenue for knowledge exchange and collaborative research focused on the digital pound.
“The AAG will encourage diverse ideas, open debate, and perspectives that challenge prevailing wisdom in relation to the digital pound,” the BoE underscored.
The formation of the AAG appears to be a response to BoE Deputy Governor Jon Cunliffe’s call in March for the UK to cultivate CBDC expertise, acknowledging a deficit in leveraging the opportunities presented by a digital pound.
Moving forward, the BoE has officially entered the design phase of its digital currency project, with this phase anticipated to span the subsequent two years. This phase is strategically designed to craft an all-encompassing and conceptual framework, including experimentation and proofs of concept conducted in collaboration with private sector innovators. This collaborative approach aims to inform the architectural development of the potential CBDC, concurrently cultivating both the central bank’s and the private sector’s technological proficiency in digital currency implementation.
In recent months, the BoE has intensively elevated its pursuit of the digital pound. Notably, Tom Mutton, the head of the CBDC project, affirmed in July that the forthcoming CBDC trial would encompass blockchain technology as well as a multitude of alternative ledgers. This move signifies the BoE’s strategic commitment to exploring innovative avenues in the CBDC landscape.
