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Private sector project makes Britcoin play

Private sector project makes Britcoin play

A new UK initiative is looking to advance the case for a retail central bank digital currency (CBDC), publishing a green paper and preparing a set of pilots.

The Bank of England and HM Treasury have been actively pursuing the case for a CBDC, dubbed Britcoin, due to the declining use of cash and the threats to monetary sovereignty posed by private digital currencies.

However, the idea has received significant pushback, most recently from a committee of peers in the House of Lords, which last month concluded that there is no convincing case for the digital pound.

Project New Era, an initiative led by The Payments Association, paywith.glass and other private industry stakeholders, and supported by Boston Consulting Group, is looking to advance the conversation with its Green Paper, which will be followed by real-world pilots looking into design questions and how to mitigate risks.

The project is putting together a private consortium to carry out the pilots using dSterling, a digital settlement asset similar to a CBDC. The focus will be on testing use cases, including retail payments, cross-border transactions Tokenisation-as-a-Service, and how to service Payment Institutions and Electronic Money Issuers.

The project then plans to share their data and feedback with central banks and policymakers.

Tony Craddock, director general, The Payments Association, says: “The widespread adoption of CBDCs could be as important to the 21st century as the end of the gold standard was to the 20th. Because of the UK’s long-standing position at the forefront of global financial services we have an opportunity to take a leading role in the next generation of financial services.

"Our next step will be to build a larger stakeholder network from the public and private sector that will be key in building the pilot project.”

Last year, a separate independent forum backed by the likes of Accenture, CGI Group and Ripple launched to push for the implementation of a digital pound and digital money ecosystem.

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