Bank of England To Launch Digital Pound Lab

The Bank of England (BoE) has announced the creation of a dedicated ‘Digital Pound Lab’ to experiment with a central bank digital currency (CBDCs).

According to the BoE’s website the move signals the end of the “consultation and response phase” and the beginning of the “design phase”.

As part of its ongoing preparation for a potential UK central bank digital currency, the digital pound lab will enable ‘hands-on experimentation’ for testing API functionality, innovative use cases and potential business models for PIPs and ESIPs

A final decision on the launch of the digital pound could take up to two years.

CCN reports: The lab looks to explore the potential applications and technological framework of a government-backed digital currency.

Following its consultation and response process, the Bank of England, in collaboration with HM Treasury, has officially entered the design phase of the digital pound.

This phase will focus on developing detailed policies and a robust technological framework for the CBDC.

The design phase, initiated in 2023, is expected to extend until the end of 2025.

During this period, the BoE will set up a digital pound lab, described as a “technology sandbox environment” for hands-on experimentation.

This lab will allow the central bank to test various use cases across multiple sectors, providing valuable insights into the digital pound’s feasibility.

The lab will emphasize application programming interface (API) functionality and explore potential business models for external service providers, including payment interface providers.

This approach aims to assess the viability of the digital pound as a platform for financial innovation.