IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

UK exploring plans to launch its own digital currency

A taskforce will examine the viability of creating a central bank digital currency alongside a wider package of fintech support measures

The government is establishing a special taskforce that combines expertise from the Treasury and the Bank of England to explore the launch of a UK central bank digital currency (CBDC).

The state-backed digital currency would operate alongside traditional currencies, and allow households and businesses to make payments using digital money issued by the Bank of England. The group will consult with stakeholders to explore how viable launching a CBDC would be, as well as how this is being handled abroad.

CBDCs are fundamentally different from cryptocurrencies because they’re managed by a central authority, such as the Bank of England, while cryptocurrencies such as Bitcoin are decentralised assets and managed through a distributed ledger.

The announcement comes as part of a wider package of measures the government is hoping will boost the UK’s fintech and financial services industries. As part of the policy, the government will establish a Centre for Finance, Innovation and Technology as well as the second phase of its Digital Sandbox to allow companies to test concepts that tackle sustainability and climate change-related challenges.

“Our vision is for a more open, greener, and more technologically advanced financial services sector,” said the chancellor Rishi Sunak. “The UK is already known for being at the forefront of innovation, but we need to go further. 

Related Resource

IT Pro 20/20: Meet the companies leaving the office for good

The 15th issue of IT Pro 20/20 looks at the nature of operating a business in 2021

IT Pro 20/20: Leaving the office for goodDOWNLOAD NOW

“The steps I’ve outlined today, to boost growing fintechs, push the boundaries of digital finance and make our financial markets more efficient, will propel us forward. And if we can capture the extraordinary potential of technology, we’ll cement the UK’s position as the world’s pre-eminent financial centre.”

Alongside prospective plans to create a digital currency, the new sandbox will give companies experimenting with distributed ledger technology the space to develop and execute their ideas.

Fintech firms will also be offered a ‘scale box’, which is a package of measures designed to guide these companies scale-up. This comes alongside a ‘scale up’ visa stream to allow skilled people a route to work at a recognised UK scale-up without the need for sponsorship.

Plans to launch a CBDC comes only a few months after Mastercard announced it would begin supporting digital currencies, but only those which adhere to a set of strict criteria that would seem to rule out most mainstream tokens, including Bitcoin.

The Bank of England has previously explored the viability of creating a CBDC, especially over the last couple of years, although has never publicly stated whether or not it considers doing so a good idea.

Featured Resources

2023 Strategic roadmap for data security platform convergence

Capitalise on your data and share it securely using consolidated platforms

Free Download

The 3D trends report

Presenting one of the most exciting frontiers in visual culture

Free Download

The Total Economic Impact™ of IBM Cloud Pak® for Watson AIOps with Instana

Cost savings and business benefits

Free Download

Leverage automated APM to accelerate CI/CD and boost application performance

Constant change to meet fast-evolving application functionality

Free Download

Most Popular

What's powering Britain’s fibre broadband boom?
Network & Internet

What's powering Britain’s fibre broadband boom?

3 Feb 2023
Dutch hacker steals data from virtually entire population of Austria
data breaches

Dutch hacker steals data from virtually entire population of Austria

26 Jan 2023
Yandex data breach reveals source code littered with racist language
data breaches

Yandex data breach reveals source code littered with racist language

30 Jan 2023