The Bank of England publishes two papers on a new digital pound, seeming to favor centralized databases over a blockchain and limiting to £10K-£20K per person
The Bank of England has set out technical features of its central bank digital currency, which officials have said is likely to be needed.
CoinDeskJack Schickler
Context & Ripple Effects
The Bank of England and UK Treasury began formal CBDC exploration through a joint digital-currency taskforce in 2021. These papers move that work from exploration toward choices on infrastructure and individual access.
The proposed design also gives a concrete national implementation to the shared CBDC design principles previously outlined by seven central banks, while debate around the digital euro shows that public purpose and consumer value remain central to CBDC adoption.
First-order effects
The Bank of England narrows the digital pound’s design space around a centralized database and a £10,000–£20,000 individual holding limit.
Prospective digital-pound users would face a defined ceiling on balances rather than treating the instrument as an unrestricted store of value.
Second-order effects
Blockchain-based CBDC architectures lose relevance to the Bank of England’s proposal relative to providers able to support centralized payment infrastructure.
The holding cap makes the Bank of England’s approach a distinct reference point for other central banks applying the shared design principles to consumer-facing CBDCs.
Third-order effects
If central banks continue pairing centralized architectures with balance limits, CBDCs are likely to develop as tightly governed public-payment layers rather than open blockchain networks.
Debate over the digital euro’s aims suggests that technical design choices will increasingly be judged alongside clear consumer and retail benefits.
The trend: Central-bank digital-currency projects are progressing from broad principles to controlled retail designs that prioritize policy oversight over blockchain-based openness.
The BoE and the UK Treasury say they'll decide whether they will move forward with a ‘digital pound’ as late as 2025. As a main reason in favour of doing it, they argue Big Tech's closed networks can't be allowed to take over the payments system. https://www.ft.com/...
Today the Bank of England and @hmtreasury have published a Consultation Paper on the digital pound, a UK central bank digital currency. Find out more here: https://www.bankofengland.co.uk/ ... https://twitter.com/...
Reading the consultation paper from the BoE and HM Treasury on the digital pound I have thoughts which I'll be sharing with them, since it's a public consultation open until June, but a few pithy remarks here on the hellsite Paper here: https://assets.publishing.service.gov.u k/ …
Why would we need a digital pound? Primary Motivations: - Ensuring the role of the UK central bank is an anchor for confidence and safety in our monetary system - Promoting innovation, choice and efficiency Fostering stability and growth with access, innovation & choice. https://…
GDF welcomes the joint consultation paper from the Bank of England and HM Treasury. The consultation is positive and thorough and examines six key technology design considerations which have been widely discussed in the initial stages of exploration. https://www.bankofengland.co.…
“Some identification would be needed to prevent financial crime” Do they not fucking know that the word “public” in public money refers to the fact that it should be accessible to the general public? For God's sake, it's not called public because it's issued by a public entity. h…
The consultation paper of the project shows that a potential limit on the amount held by each citizen between £10,000 and £20,000 per individual is likely to strike an appropriate balance between hanging risks and supporting wide usability of the digital pound.
The Bank of England would not be able to restrict how users' digital pounds are spent. But innovations in technology may allow users to program their money to use it in new ways. Find out more here: https://www.bankofengland.co.uk/ ... https://twitter.com/...
The digital pound would be subject to rigorous standards of privacy and data protection. It would be privacy-enhancing by design and would allow users to make choices about their data. Find out more here: https://www.bankofengland.co.uk/ ... https://twitter.com/...