In my opinion, I think the second half of the decade would be the very first possible date. “The answer is if we were to do this – and it’s an if – it would be a multi-year project. Nonetheless, we asked Tom Mutton when this could be implemented at the earliest if the Bank creates one. Since the Bank has not made a decision on whether or not to go ahead with a digital currency, it naturally does not have a specific release date in mind. Find out more: challenger and mobile banking explained.This would allow each party to leverage its strengths, Mutton says, with the bank providing the money and the private companies providing “really innovative services” and “hopefully good customer service.” “The Bank of England would focus on its specialty of providing very safe and reliable money, so we would leverage the core technology and infrastructure, and would do the onboarding and sign people up for the service. Mutton says the apps and the maps themselves would be provided by private sector companies. “But it’s really important that people who don’t have a smartphone can use it too.” To remedy this, alternatives to an app, such as prepaid cards, are also being explored. “We think CBDC would most likely be accessible and used through a smartphone app,” Mutton said. A CBDC on the other hand would be made for everyday expenses. At present, cryptocurrencies like Bitcoin are mainly used as investments and their value can fluctuate. “Britcoin” should not be confused with Bitcoin, as a CBDC wouldn’t necessarily work the same way. He believes, however, that people are unlikely to use the CBDC for longer-term savings. They could even use it for high value purchases like televisions or vacations. Mutton says people could get their paychecks in the CBDC, use it for shopping, or pay bills. And £ 10 of CBDC will still have the same value as £ 10 of cash. “And because it would be money provided by the Bank of England, it would be a very safe and reliable form of money. “So the Bank of England provided money for the daily payments of households and businesses. So what would they actually mean for people on a daily basis? “I like to think of CBDC as a bit like a digital banknote,” Mutton told us. But in most countries at the moment, they’re hypothetical. Simply put, a CBDC is a digital currency backed by a country’s central bank – so it’s the Bank of England in the UK or the Federal Reserve in the US, for example.Ĭentral banks around the world are leaning into digital currencies, with some launching or piloting them already. You can hear Tom Mutton’s interview, as well as the analysis of Which? Experts in Money, in the episode of the week of Which? Podcast on money. 7 What will the future of payments look like?.5 What would a CBDC mean for confidentiality?.4 When will the Bank’s CBDC be launched?.1 Listen to the Bank of England interview.
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