The Bank of England and HM Treasury have opened applications for a proof-of-concept Central Bank Digital Currency (CBDC) wallet, according to an announcement on June 19. The BoE has reportedly been working with the government since last year to develop the technology behind a digital currency.
The Bank of England has opened applications for a proof-of-concept project that will build a payment system based on its own cryptocurrency, called the central bank digital currency (CBDC).
The bank is looking for developers and researchers to submit their ideas on how they could create a new application using the CBDC. The deadline to apply is November 5, with winners announced in December.
Bank Of England Gives The Nod
The Bank of England (BoE) and HM Treasury have opened up applications for a proof-of-concept Central Bank Digital Currency (CBDC) wallet, according to an announcement on June 19.
The BoE’s payment systems director Chris Salmon told Reuters that the bank was looking to find “a new kind of money” by reducing costs and improving customer experience.
He added that this would allow consumers to make payments “almost instantaneously” using digital currency.
A CBDC is a digital currency issued by a central bank and backed by government guarantees. Unlike cryptocurrencies such as Bitcoin, which are decentralized, meaning no one institution controls them, CBDCs are controlled by the issuing bank.
This news comes just months after the Bank of England announced it would begin testing its own cryptocurrency in 2020. At that time, it was believed that if this new type of digital asset were successful in its trials and tests, it could be available for use within two years.
The Bank of England is the first central bank to start developing a digital currency on its own, but it’s not alone. Several other countries have started exploring the idea as well. Last month, Japan launched its own government-backed cryptocurrency called J-coin that will use blockchain technology in order to make transactions between banks faster and cheaper than before. Meanwhile, Sweden has been experimenting with developing its own digital currency since 2017 when it partnered with Nordea Bank AB—one of Europe’s largest financial institutions—to develop new ways of managing money digitally while also keeping up with modern technology trends such as mobile payments and AI assistants like Siri or Alexa.”