3 - 5 minute read
The Bank of England is looking to assemble a team of up to 30 experts to develop a central bank digital currency (CBDC). The Sunday Times reported this on April 18th, without mentioning their source. The Bank and the U.K. treasury began researching and developing a digital version of the pound sterling in February of this year.
In an attempt to gather public opinion, the Bank and Treasury invited people to weigh in on the digital pound’s design. Regulators believe that a central bank digital currency could boost the U.K’s international payments system and reduce fraud.
The bank’s website now lists positions available for the roles of ‘Digital Pound Security Architect’ and ‘Digital Pound Solutions Architect.’ Both positions offer a salary up to 80,000 British pounds ($99,000). Meanwhile, Treasury advertised for the role of ‘Head of Central Bank Digital Currency’ in January.
According to Ian Taylor, a board adviser for trade association CryptoUK, “A team of 30 seems like quite a significant resource to focus on the digital pound… It shows the impact it would have, and that the Bank are serious about it.”
What is a CBDC?
A central bank digital currency is simply a digital version of fiat currency that is government-issued and backed by a central regulatory authority. The digital pound is expected to function in the same manner as physical money. This means that it would be regulated and managed by a central authority and its value would remain the same as physical pounds.
At the same time, the digital pound may have a number of additional benefits. Because of its digital nature, payments made with the digital pound will be processed more quickly than traditional bank transfers. That means that the digital currency could facilitate instant payments between businesses and individuals.
What’s Next for Traders?
Although there is no telling when a digital pound will be launched, it is important for traders to keep tabs on the Bank and the Treasury’s research on this issue. Central bank digital currencies could significantly impact traditional cryptocurrencies, with benefits including faster transaction speeds and lower fees. However, the introduction of a CBDC could also lead to tighter government control on financial transactions.
Accordingly, it would be wise for traders to keep informed of any developments and plan ahead to adapt to changes. At present, regulatory authorities worldwide are still trying to determine how best to regulate cryptocurrencies, with some countries accepting them and others outright banning them. As things stand, it is difficult to determine the UK’s mode of operation regarding crypto regulation in the coming years.
The Bank of England’s current job postings for ‘Digital Pound Security Architect’ and ‘Digital Pound Solutions Architect’ indicate that a CBDC launch could be on the horizon. A team of 30 experts will be involved in managing its development, leading to the possibility of a digital pound launch in the near future. While there is no telling how the Bank will regulate digital currencies, traders must keep an open ear and remain vigilant.