Bank of England’s CBDC Project and Privacy Element
The Bank of England (BoE) has made considerable progress in its Central Bank Digital Currency (CBDC) project. Tom Mutton, the BoE’s director of fintech, recently discussed the privacy element of the CBDC and why the central bank may consider alternatives to blockchain as the foundation technology.
At a recent meeting of technologists convened by the Bank of England to discuss the design of a digital pound, Mutton noted that there was a clear divergence of opinion regarding which ledger should be employed for the CBDC. As a result, the bank intends to trial a variety of ledger technologies, including blockchain.
Dubbed ‘Britcoin’, plans for a digital pound were initially suggested when the Treasury and the Bank of England created a joint task force to examine a U.K. Central Bank Digital Currency in April 2021. Subsequently, in February 2023, the bank released a consultancy paper describing the structure of the digital pound.
A digital pound could potentially exist alongside private stablecoins.
Trial of Different Ledger Technologies for Digital Pound
The Bank of England and His Majesty’s Treasury are currently asking stakeholders and technology experts for their opinions on the proposed design of the CBDC, with the feedback period open until June 30th.
Cointelegraph attempted to contact the Bank of England to ask about other ledger technologies they were looking into, however, the Bank of England did not provide a response prior to the article’s publication.
Besides discussing ledger technology, Mutton also addressed the privacy element of the CBDC, expressing that it will be geared towards giving users privacy and will not accumulate private information. He declared that the bank would be in charge of providing the framework, while private parties will be responsible for the creativity.
Mutton asserted that neither the BoE nor the government would be able to gain access to any user data, and even those wallet providers who have limited access to the data will require permission from users regarding what information they can store. With a focus on retail, the BoE had previously declared that the digital pound could be compatible with private stablecoins.
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