Jon Cunliffe said that there is still more than 50% chance for the UK to launch CBDC in the future despite lack of technical knowledge.
The Central Bank Digital Currency (CBDCs) is a blockchain technology-based digital concept based next generation form of sovereign fiat currencies. To this date, many Central Banks are studying and developing CBDC. In the race for CBDC development, China is standing at the top. In late 2021, the People Bank of China (PoB) launched the CBDC pilot program in the country. At the second position, Nigeria also launched its CBDC (e-Naira) but failed to push adoption among the citizens’ daily life payment activities.
On 28 Feb 2023, During the treasury select committee hearing, The Bank of England (BoE) deputy governor Jon Cunliffe said that the United Kingdom (UK) is not ready to issue or launch any form of CBDC because the central Bank agency BoE doesn’t have suitable expertise in this field.
Despite such technical challenges, the Deputy Governor noted that the Central Bank of the UK still expects to launch CBDC with more than 50% probability.
In the next phase of CBDC development, BoE official said that BoE will design a prototype of CBDC and further test it in the live environment.
According to Cunliffe, UK’s CBDC design & structure will be significantly different from the traditional form of sovereign fiat currency and it will help to make CBDC behave as digital cash, or the digital equivalent of BoE notes, for “general payment purposes.
Further, BoE deputy governor confirmed that the Central Bank will also take help from the private sector companies i.e Fintech companies having expertise in crypto & blockchain technology.
Cunliffe noted that UK’ CBDC design will also allow the citizens to pay in very small amounts and that will be easier, more like reading a newspaper without subscription.
“This will be much, much easier for you to make very, very small payments. So if you wanted to read an article in a newspaper, you wouldn’t have to subscribe to the newspaper. You could pay tiny fractions to do that,” BoE governor said.