CBDC: Bank of England to Test Digital Currencies and DLT Integration

England's central bank is set to launch a new series of tests involving distributed ledger technology (DLT) and wholesale central bank digital currencies (wCBDC).

These initiatives aim to explore the evolving landscape of payments and assess the implications of new financial technologies.

As cryptocurrencies and their underlying technologies gain traction, central banks globally are investigating how to integrate these innovations.

The Bank of England is involved in Project Agora, a BIS-led initiative examining the exchange of tokenized bank deposits and central bank money across different currencies.

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Governor Andrew Bailey highlighted the need for the Bank to adapt alongside technological advances to ensure monetary and financial stability.

The experiments will focus on asset transfers between platforms, including those using DLT, while ensuring compatibility with the bank’s Real Time Gross Settlement system.

Additionally, the Bank of England plans to collaborate with the Treasury and financial regulators to maintain the consistency of different forms of money, including stablecoins and tokenized deposits, ensuring they remain interchangeable.

Source

Alexander Stefanov