Payments
Bank of England moves closer to digital pound
June 16, 2023
The Bank of England is seeking public feedback on how to design a central bank-backed digital currency: a digital pound.
The central bank and the Bank for International Settlements have published a report on potential use cases called Project Rosalind. The project found a CBDC could make payments easier, as well as reduce fraud and automatically settle payments to an online vendor, according to a Yahoo Finance report.
Quant, a blockchain infrastructure provider, has been testing a prototype CBDC since 2022. It provides a multi-party lock payment that clamps a digital asset so a vendor knows a payment has arrived.
"Having this conditional logic and smart money allows us to have fraud prevention as opposed to fraud protection," Gilbert Verdian, CEO and founder of Quant, told Yahoo. "There's an opportunity for a digital pound to be one of the currencies that the world prefers because it has all this smart money logic built in a safe environment."
Jon Cunliffe, deputy governor of the Bank of England, has said this future tool will be private but not necessarily anonymous, according to a Politico report.
"Every transaction you make with your credit card, with your phone, using your bank account, is recorded and stored," Cunliffe said during Politico's Global Tech Day. "Under certain circumstances, the authorities, law enforcement, tax...can have access to the records of all of your transactions in your bank accounts."
In essence, the bank would not have access to customer data, but the wallet would store the information securely in case law enforcement would need access to it.
"For a CBDC, we would completely respect that balance," Cunliffe told Politico. "Complete anonymity has with it the potential for social harms, tax evasions, crime, terrorist financing."
Currently, the bank has received 50,000 responses for feedback on a potential digital currency, according to Politico. The bank expects to close off responses by the end of June, stated Yahoo.
