The consultation is open for comments until 7 June 2023. Alongside the Consultation Paper, a Technology Working Paper was also released. This outlines the digital roadmap, the technology and policy terms and the model for the digital pound.
The roadmap to the digital pound being launched consists of three phases.
- Phase 1: This focuses on Research and exploration, which began in 2022. To proceed, a decision will need to be made on whether investment in further technology is worthwhile.
- Phase 2: This is when the digital pound is designed, this will be from 2023-2025/26. To proceed, there would need to be major public investment. It would also need to be secure when it comes to legalities, which should be determined based off the design created.
- Phase 3: Finally, it is time to build, which could happen in 2025 at the earliest. After this, the only questions that would remain would be, should the digital pound be launched?
So, it looks like the earliest year the digital pound could be released is 2025. Though, how well it will be implemented, or if it will be implemented at all, remains unclear.
Work is currently being done on the ‘design phase’ which will look at the technology and policy requirements for a digital pound, so everything is ready to go should they decide to proceed. Private and public sectors will collaborate to create an optimal design for the currency, and the Bank of England will only know whether the digital pound is feasible once this phase is complete. So, it may be that the model will become clearer in the future, as new benefits are found, and challenges are overcome.
While we will have to wait to see the outcome, it might be worth looking at other countries to see their developments. Countries around the world are considering similar proposals.
The U.S being one of these countries, whose central bank digital currency will be issued by the Federal Reserve, acting as legal tender.
Could we be waving goodbye to cash on a global scale?