Bank of England enlists help for study of CBDC
The Bank of England (BOE) has enlisted the help of 2 study groups which will provide inputs for the bank as far as the launch of CDBCs is concerned.
The 2 study groups are the Engagement Forum and the Technology Forum and the members of the group belong to a cross-section of people who have worked in banks, payment service companies as well as crypto-related businesses as well and they would be expected to provide inputs and guidance to the BOE on the preparedness that is needed for the launch of CBDCs. By enlisting both the Engagement Forum, which helps with strategy and policy and Technology Forum, which helps with the technical design and implementation, the BOE has made its intention of launching CBDCs very clear.
Of course, after all the designs and testing, it may still choose to not go ahead with the CBDC as it would look towards what other countries and the central banks are doing before making a decision. The launch of the CBDC is likely to require a coordinated effort from the central banks of many countries as if the CBDC is launched only by a few countries and not by the others, then it could cause some confusion in the financial ecosystem which would not be welcomed by anyone. That is why many of the central banks are keeping their cards close to the chest and not revealing any plans of testing or launch of the digital currency.
Other countries, like Nigeria, have gone ahead with the launch of a digital version of their fiat currency and though they seem to have some well-laid plans on how to roll out these digital currencies and how they are to be acquired and used by their citizens, they do not seem to yet define on how these currencies would interact with the fiat currencies of other countries which is where the challenge comes and which is where the need to convert these digital versions to their fiat versions would come in. If this is going to be the case, then the users may not be interested too much in the CBDCs as the frequent conversion of these into fiat and the charges for these conversions would kill the ecosystem. All these considerations would be at the back of the mind of the BOE as it continues engaging with the community.
