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The Her Majesty’s Treasury and the Bank of England have started tentative central bank digital currency tests, which may lead to the development of a national digital currency.
In a document published by HM Treasury, the exchequer announced the creation of a CBDC taskforce in collaboration with the U.K.’s central bank.
The task force will be co-chaired by Jon Cunliffe, deputy governor of the Bank of England, and Katharine Braddick, director general of financial services at HM Treasury.
The task force, according to the terms of reference paper, will coordinate the activities of all applicable legislative bodies in the United Kingdom in the implementation of CBDCs.
The task force will investigate preliminary problems related to the creation, development, and activity of a CBDC in the United Kingdom as part of its responsibilities. The task force will also consult with stakeholders in academia, fintech, and other related sectors to recognise the technical challenges involved in developing a sovereign digital currency.
The joint HM Treasury and BoE task force will also keep an eye on CBDC-related developments around the world, particularly as other countries are actively exploring their own central bank digital currency ventures.
According to a BoE press release issued on Monday, the central bank will also run its own internal CBDC unit headed by Jon Cunliffe.
The task force’s formation is yet another example of the UK government’s focus on digital currencies and fintech in the wake of Brexit. Rishi Sunak, the chancellor of the Exchequer, said in November 2020 that Brexit provided an incentive for the United Kingdom to revamp its financial services business.
Sunak has overseen a major policy change towards leveraging novel fintech technologies such as CBDC and stablecoins since Brexit. As previously noted by Cointelegraph, the United Kingdom’s financial services minister, John Glen, has described stablecoin legislation as the government’s primary priority in the field of cryptocurrency regulations.
According to a report by Reuters, the United Kingdom’s financial sector focus is also expanding to include distributed ledger platform companies. Sunak revealed on Monday at a financial industry conference that the government intends to create a fintech sandbox for blockchain startups.