On 8 September 2021, UK Finance issued a report Retail CBDC – A threat or opportunity for the payments industry? .
In April 2021, the Chancellor announced a new Taskforce between HM Treasury and the Bank of England (BoE) to explore a UK central bank digital currency (CBDC). The BoE issued a discussion paper on 7 June 2021 looking at the opportunities and risks of new forms of digital money, including a UK CBDC. The deadline for comments on the discussion paper is 7 September 2021.
To help further the debate, the UK Finance report explores what a CBDC is, how it could impact the UK payments system and what issues UK banks should consider. The report also considers the opportunities and risks for the BoE, the government and the commercial market, as well as the possible impact on consumers.
Among other things the report concludes by stating that there are a range of significant issues beyond technology that central banks will have to grapple with. In particular, sustainability will be a key consideration, both around the use of energy of some cryptocurrencies but also the potential power of a CBDC to boost greener behaviour.