Central bank digital currency

(CBDC).

Digital currency issued and administered by a central bank.

Bank of England considering CBDC

"A Central Bank Digital Currency (CBDC) [in the UK] would allow households and businesses to directly make electronic payments using money issued by the Bank of England.

We have not yet made a decision on whether to introduce CBDC.

The Bank [of England] provides physical money in the form of banknotes, which can be used by households and businesses to make payments.

We also provide electronic money, but this can only be used by banks and selected financial institutions.

A Central Bank Digital Currency would make electronic money, issued by the Bank of England, available to all households and businesses.

This would allow everyone to make electronic payments in central bank money.

... CBDC is sometimes thought of as equivalent to a digital banknote, although in some respects it may have as much in common with a bank deposit.

Any CBDC would be introduced alongside – rather than replacing – cash and bank deposits."

Bank of England - 2020.

Improving cross-border payments

"Many central banks are researching CBDC, and there are clear opportunities for CBDCs to improve cross-border payments and protect monetary sovereignty."

Bank for International Settlements, Paper 115 - March 2021.

Supporting new technologies

"The introduction of a Central Bank Digital Currency (CBDC) would be a significant development which could help support the adoption of new technologies (e.g. blockchain) in financial services."

Kalifa Review of UK Fintech - February 2021.

See also

• Account
• Altcoin
• Bank of England
• Bank for International Settlements
• Bitcoin
• Blockchain
• Central bank
• Crypto-assets
• Cryptocurrency
• Cryptography
• Currency
• Deposit
• Digital currency
• Distributed ledger
• e-krona
• e-money
• Ether
• Fiat currency
• Gold standard
• Libra
• Money
• Ripple
• Stablecoin

External links

Central bank digital currencies - Bank of England

Bank of International Settlements, Central Bank Digital Currency

ACT Webinar, Central Bank Digital Currencies, Overview of the Bank of England's Work, March 2021]