The Future of Digital Currency: The Bank of England’s Stance on the programmability of Digital Pound

04/04/2023 17:33 • Tech Trends • 123 views

According to reports, last week Katie Fortune, Senior Manager of the Central Bank’s Digital Currency (CBDC) department at the Bank of England (BofE), suggested that the digital pound would not include government enabled programmable features to avoid misunderstandings about excessive government expansion. Katie Fortune stated that, like the digital euro, the core of the digital pound is not programmable, but programmability can still be implemented by the private sector. A two-layer model with a private sector layer in the middle can be built on top of BofE’s infrastructure. In this way, it will be private companies that deal with end users. This will enable UK banks to support innovation while maintaining independence.

Bank of England official: The view that the digital pound CBDC will not be programmable to avoid government control

The Bank of England is one of the world’s most respected financial institutions, playing an essential role in the global economy. With the rise of digital currencies and the need for their integration into the traditional banking system, the Bank of England has been actively exploring the potential of the Central Bank’s Digital Currency (CBDC). In a recent report, the senior manager of the CBDC department at the Bank of England, Katie Fortune, discussed the non-programmable features of the digital pound to avoid misunderstandings about excessive government expansion.

Understanding the Bank of England’s Digital Currency ambitions

In recent years, the Bank of England has been actively exploring the potential of digital currencies, specifically the Central Bank Digital Currency (CBDC). Given the increasing popularity of cryptocurrencies like Bitcoin, the Bank of England has been researching the development of a digital pound, which would enable the country to keep up the pace with the evolving financial landscape.

CBDC Department’s Senior Manager, Katie Fortune’s clarification on the Programmability

According to reports, Senior Manager of the Central Bank’s Digital Currency (CBDC) department at the Bank of England, Katie Fortune, suggested that the digital pound would not include government enabled programmable features. This clarifies that the core of the digital pound is non-programmable, which means it will not be possible to build smart contract systems on top of it.

private sector layer in the middle

Fortune suggested that a two-layer model with a private sector layer in the middle can be built on top of BofE’s infrastructure. In this way, it will be private companies that deal with end users. This offers a solution for those who wish to design their own digital assets on top of the BofE’s infrastructure. In essence, the private sector will have the freedom to innovate, while the BofE will maintain independence.

Significance for UK Banks

Fortune’s statements offer insight into the Bank of England’s vision of integrating the digital pound into the traditional banking system. This non-programmable feature will provide stability, ensuring that the country’s financial system remains strong. In addition, the Bank of England’s approach of enabling private companies to handle programmability is a unique solution that provides healthy competition within the financial ecosystem. Banks in the UK will be able to support innovation while maintaining their independence and stability.

Conclusion

The Bank of England’s approach is a unique solution that balances the need for regulation with innovation. By allowing the private sector to handle programmability, the Bank of England ensures that the financial ecosystem remains robust and competitive. UK banks will be able to support innovation while maintaining their independence and stability.

FAQs

1. What is the Bank of England’s stance on the programmability of the digital pound?
Ans: According to reports, the senior manager of the Central Bank’s Digital Currency (CBDC) department at the Bank of England, Katie Fortune, suggested that the digital pound would not include government enabled programmable features.
2. What does this mean for the UK banking industry?
Ans: The Bank of England’s approach of enabling private companies to handle programmability is a unique solution that provides healthy competition within the financial ecosystem. Banks in the UK will be able to support innovation while maintaining their independence and stability.
3. How will the Bank of England’s two-layer model work?
Ans: A two-layer model with a private sector layer in the middle can be built on top of BofE’s infrastructure. In this way, it will be private companies that deal with end users. This will enable UK banks to support innovation while maintaining independence.

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