Temitope is a writer with more than four years of experience writing across various niches. He has a special interest in the fintech and blockchain spaces and enjoy writing articles in those areas. He holds bachelor's and master's degrees in linguistics. When not writing, he trades forex and plays video games.
The Bank of England is progressing with its Britcoin digital currency project as it released results from the Rosalind project, which started in July 2022.
As the idea of making cash more decentralized continues to grow in popularity, the CBDC has also been an up-and-coming project in different countries. Britcoin, the name for the Bank of England (BoE) digital currency, is also closer to being launched.
The digital currency, which is to be backed by the British Pound, is aimed at sustaining the trust people have in money while protecting the country’s financial system from high-profile crashes and exposure to scams, which many volatile digital currencies have had to deal with.
CBDC has been the subject of the ongoing Project Rosalind, which is part of the move to test the best way an Application Programming Interface (API) could be implemented in CBDC for retail transactions. The study started in 2022 and is being controlled by the Bank for International Settlements (BIS) and the Bank of England.
Results from Project Rosalind CBDC Study
According to a report published on June 16 by the BIS Innovation Hub, the study shows that using a good API can help achieve a broad range of use cases. The project saw the development of 33 API functionalities to test more than 30 CBDC use cases and how they work for online and offline payments using QR codes, mobile phones, digital cards, and carrying out micropayments.
Project Rosalind tried to explore the general benefits of a CBDC and how it could work, seeing that central banks are increasingly turning their attention to it. The results from the ongoing research show that CBDC could make payment easier, facilitate the creation of more financial products, and reduce the chances of financial fraud.
It was stated in the report that “Project Rosalind demonstrated that a well-designed API layer can enable a central bank ledger to interact with private sector service providers to safely provide retail CBDC payments.”
Quant, a blockchain network, also announced that it is a part of the vendor team for Project Rosalind. The company also mentioned partnering with UST to carry out the project. While UST is working on the frontend Rosalind API layer, the Quant team makes the infrastructure and blockchain platform available to provide smart contracts and easy interoperability.
The company stated on its website that:
“We’re proud to announce our role as part of the vendor team for Project Rosalind. The project, led by the Bank for International Settlements and the Bank of England, explored how application programming interfaces could be used for central bank digital currency systems.”
CBDC – a Central Bank Response to Cryptocurrency Adoption
As cryptocurrencies become more widespread, central banks could eventually lose control over how money is supplied, the general payment system, and even countries’ economies at large. However, the creation of CBDC serves as the central banks’ reaction to these moves, putting them in a better position to compete with or displace other cryptocurrencies for transactions within the country.