The BoE has published a report setting out the work it has done in the last year on the digital pound and the evolving payments landscape.
The regulator has been working with HMT to explore the possibility of a digital pound. After completing the design phase over the next years, the BoE and Government will assess the policy case for a digital pound and determine whether to proceed.
The digital pound design phase features four workstreams, and the report outlines progress so far on each:
- Experiments and proofs of concept – focussed experiments in collaboration with private sector firms, to establish technological feasibility of design choices;
- Blueprint – a proposed model and design of a potential digital pound which will form the basis for the assessment;
- National conversation – a programme of engagement by the BoE and HMT to ensure stakeholder views are taken into account; and
- Assessment – a framework to evaluate the costs and benefits of a digital pound, to inform the decision on whether or not to proceed to the build phase.
Regardless of the outcome of the assessment, the BoE expects the design phase to bring significant benefits to UK fintechs.
The BoE anticipates publishing design notes to present its emerging thinking on specific aspects of a digital pound. In 2025, it will also launch the Digital Pound Lab, allowing it to test API functionality, innovative use cases and potential business models for payment interface providers and external service interface providers.