The Bank of England (BOE) has become the latest central bank to enhance its efforts regarding the development of a CBDC. Recently, BOE has partnered with the Massachusetts Institute of Technology (MIT), one of the top technology universities in the world, for joint research on central bank digital currencies.
According to the details shared by the Bank of England, the twelve-month research project will explore potential challenges, opportunities and risks associated with the designing of a central bank digital currency system. For the research, BOE will work with the Digital Currency Initiative (DCI) team in the Media Lab of the Massachusetts Institute of Technology.
“The collaboration forms part of the Bank’s wider ‘research and exploration’ into CBDC and will be focused on exploration and experimentation of potential technology approaches. This work is focused on exploratory technology research and is not intended to develop an operational CBDC,” BOE highlighted in a recent announcement.
Central banks around the world have increased their efforts for the research and development of CBDCs. Amid rising demand for emerging technology, the European Central Bank (ECB) in July 2021 said that it has launched the investigation phase of the Digital Euro project to address key issues regarding the design and distribution of the Digital Euro.
CBDC Research
Earlier this month, the Bank of Canada announced a collaboration with MIT for CBDC research. While some countries are still thinking about the implications of a CBDC project on local economies, countries like Kenya, Korea and Jamaica have already taken the lead in the global CBDC ecosystem. Recently, the Bank of Korea completed the first phase of CBDC testing.
While providing details of the recent partnership with MIT, BOE mentioned: “No decision has been made on whether to introduce a CBDC in the UK, which would be a major national infrastructure project. Undertaking this type of technical research will help inform wider policy thinking around CBDC.”
