Following a lengthy test project on the potential advantages of the technology, the Bank of England (BoE) is getting closer to introducing its Central Bank Digital Currency (CBDC). To assist in deciding whether to list a CBDC, the BoE introduced Project Rosalind last year.
Bank of England (BoE) Announces Completion of CBDC Test Project
To make CBDC usage practicable, the BoE launched the CBDC initiative in partnership with the Bank of International Settlements (BIS). The BoE’s CBDC may enhance the payments environment, according to a report the BIS released on Friday.
The CBDC may make payment processing considerably quicker and simpler, according to the research. For businesses, the asset would aid in the introduction of financial goods and the detection of dishonesty or fraud.
A well-designed API layer could work with different private sector applications and central bank ledger designs and a set of simple and standardized API functionalities could support a diverse range of use cases.
BIS’ Report
How Will CBDC Prevent Fraud?
Schedule settlement at a particular time or after a predetermined event would be one way the BoE’s CBDC may contribute to reducing fraud. For instance, an online retailer will not be paid unless a consumer confirms that the products they have purchased are suitable or complete.
Test Results Positive
The creation and introduction of a CBDC are likely to occur at a later period, according to the BoE. The Bank hasn’t decided on a set time or whether to move further, though. It stated that in addition to help from the UK Treasury, numerous discussions are required.
Possible Benefits of CBDC
A CBDC, in the opinion of representatives from the UK Treasury and the BoE, would have many advantages. The digital pound would be less expensive for businesses due to reduced settlement costs and quick online payments, according to Ben Broadbent, the BoE’s deputy governor for monetary policy. Many anticipate the launch of the digital pound, also known as the “Britcoin,” towards the end of 2023.
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