To find out what impact a central bank digital currency would have on them, the Bank of England is speaking to businesses and communities
Central bank digital currency (CBDC) will be considered by the Bank of England because it said the way people are choosing to pay for things is changing, the bank said on its website.
The central bank of the United Kingdom said people were using cash less and financial technology (fintech) firms have started to offer new forms of money and new ways to pay. The Bank posted a statement last week that these changes mean new opportunities and risks that the central bank needs to plan for.
Central bank digital currency (CBDC) is money that a central bank, like the Bank of England, can produce. Because it isn’t physical money like notes and coins, it is called digital (or electronic). It is in the form of an amount on a computer or similar device.
The central bank said it was looking closely at whether central bank digital currency in the UK should be introduced and how it might work if it is introduced. It said BoE has not made a decision to introduce one, so it hasn’t got a name, but a CBDC is not a cryptocurrency like bitcoin.
To find out what impact a central bank digital currency would have on them, the Bank of England is speaking to businesses and communities. It was also working with international partners and organisations, the bank said on the website. It said it was, for example, working with the Bank for International Settlements. And we are working with finance ministries and central banks in other countries.
Looking forward to improve money and payment services, the Bank said that it has always looked for new ways. For example, it has used polymer notes because these are harder to counterfeit than paper ones and they last longer.
To rebuild the payment infrastructure that we offer to banks and other institutions, the central bank also said it is using the latest technology.
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