Digital Pound Lab to explore UK CBDC use cases

The initiative will focus on blockchain-powered payment systems and strategic collaboration with local and international financial entities to address payment system challenges.

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The Bank of England (BoE) has announced plans to launch a new initiative called the “Digital Pound Lab” in 2025, aimed at testing the potential for a central bank digital currency (CBDC), commonly known as a digital pound. This sandbox project will focus on developing blockchain-powered payment systems and exploring use cases and business models for a digital currency. The BoE aims to collaborate with both local and international financial players to address challenges in the current payment ecosystem.

Despite the initiative, no final decision has been made regarding the introduction of a digital pound. The BoE’s report clarified that the central bank and HM Treasury will first work on developing a detailed policy and technology framework, based on feedback gathered during the design phase. The process could take several years before any conclusions are drawn.

The BoE has closed its previous Technology Forum to make way for the Digital Pound Lab, which will take a more active, hands-on approach to consulting with industry participants. However, even if the lab progresses, the digital pound would still require approval from the UK Parliament, followed by public consultation and legislation before any official rollout.