UK Treasury minister John Glen has outlined a pathway to the creation of a UK central bank digital currency, with the option of a live launch in the "second half of the decade".
The Bank of England is currently consulting with a broad range of stakeholders from across the economy and society, including consumer groups, think tanks, businesses, academics, financial institutions and technology experts, in its exploration of a business case for a CBDC.
As part of those explorations, HM Treasury and the Bank of England will publish a consultation in 2022 setting out their assessment and the merits of further work to develop an operational and technology model for a UK CBDC.
In a written Parliamentary statement, Glen says that if there is a decision to proceed following the consultation, a development phase would include the publication, by the Bank of England, of a technical specification to explain the proposed conceptual architecture.
Following this, a decision would be taken on whether to move into a subsequent build and testing phase.
"Given the scale and national importance of such a project, this phase would likely take several years and could involve the development of large-scale prototypes and live pilots," says Glen. "Were the results of each of these phases to conclude that the case for CBDC were made, and that it were operationally and technologically robust, then the earliest date for launch of a UK CBDC would be in the second half of the decade."
Calling for policymakers to move faster towards introducing a CBDC, Simon Youel, head of policy and advocacy at Positive Money, says the future of money is being surrendered to a cartel of private banks, card companies and tech giants.
“By the second half of the decade multinational corporations such as Facebook may have already launched their own currencies, which could quickly scale up and dominate the global monetary system, with dire consequences for accountability, privacy and economic policymaking," he says. “Central bankers have been caught sleeping at the wheel, and should be acting much faster to introduce new public digital currencies if we are to maintain any hope of having democratic control over our money and banking system.”