By
Bhushan Akolkar
May 13th, 2024
With no concrete decision on whether or not to develop a CBDC in the UK, the idea of a wallet seems to be completely ruled out.
While the issuance of a Central Bank Digital Currency (CBDC) remains an open question in the UK, the Bank of England may not be developing a retail wallet for the digital currency. A senior manager in the bank’s CBDC unit, Katie Fortune, said that the Bank of England is “highly unlikely” to launch a retail wallet for storing and sourcing its CBDC. The development of CBDCs is across several central banks globally. While some are still in the preliminary stage, some are active in trial stages ahead of a launch date.
In November 2021, the Bank of England, in partnership with HM Treasury (HMT), announced the “next steps on the exploration” of a UK CBDC. According to the press release, the Bank of England will issue the CBDC for households and businesses. The institution noted that digital currency would exist alongside fiat currencies and not replace them.
The bank and HMT plan to release a consultation paper this year to set out their assessment of the CBDC. The paper will also discuss the advantages of furthering an operational and technology model for a UK CBDC. Also, the consultation will analyze the benefits and implications for users and businesses. The paper will be part of the “research and exploration” phase. Also, it will inform policymaking and development in the coming years.
Bank of England May Not Develop a Wallet for CBDC, Official Reveals
With no concrete decision on whether or not to develop a CBDC in the UK, the idea of a wallet seems to be completely ruled out. Fortune said:
“I think it’s safe to say it’s highly unlikely that the Bank would raise a retail wallet.”
The executive said the private sector may be responsible for a wallet that supports a UK CBDC. Whereas, other countries are supporting a state-backed wallet for their digital currencies. The El Salvador government encourages its citizens to use the official wallet- Chivo. El Salvadorans have been using Chivo to manage their Bitcoin holdings since BTC became a legal tender in the country in 2021. Also, China has released a pilot version of e-CNY, the mobile wallet for the digital yuan.
Furthermore, Fortune said it is unclear if a CBDC by the Bank of England will be built on blockchain technology. She said that it remains a “really open question.” According to the executive, the central bank surveyed different views through its CBDC forums. The forums include bank representatives and others from academics and fintech firms.
After the central bank and HMT issues a consultation paper this year, the next stage would be the development phase. The executive noted that the earliest time for a UK CBDC launch, in her opinion, is 2025.