Bank Of England To Roll Out A CBDC Research Project With MIT

The central bank of England declared on Friday to have had made a contract with the DCI (Digital Currency Initiative) of Massachusetts Institute of Technology (MIT) Media Lab on a mutual twelve-month long research project over CBDC (central bank digital currency). The bank mentioned in its statement that the latest project was focused just on research-related purposes, rather than with any intention to construct a functional CBDC.

The bank started understanding CBDC during 2020, with the issuance of discussion documents in that year’s March, which were responded to by the DCI in a written discussion regarding how could the set goals be dealt with by a CBDC. The treasury as well as the bank turned toward an exploratory task force for the respective matter in recent April. The new discussion paper of the bank on CBDC was issued on Thursday.

The discussion also included some other voices, as the House of Lords Economic Affairs Committee – for instance – revealed mixed sentiments regarding a likely digital pound in the early period of this year, indicating benefits such as settlements’ enhanced speed as well as the economy and the swiftness of the payments across the borders, along with the threats posed to the privacy protection as well as the financial stability of the country. The committee seemed to be indecisive in taking a side in this way.

The England-based central bank has joined forces with the Bank of Canada, Bank of Boston, as well as the Federal Reserve for the research conducted by the DCI, the venue known to be the initiator of the project named OpenCBDC. The Canadian central bank declared the year-long mutual research endeavours thereof recent week, whereas the DCI partnership has already been started by the Boston Fed during 2020. With further development in the respective research, some more broad perspective on the behalf of the Bank of England is expected.

Nevertheless, MIT is not the sole organization in the respective sector. Nearly 60 nations are at present into the subject of CBDCs, with up to 15 having begun their pilot projects, taking account of the native digital yuan of China. South Africa, Singapore, Malaysia, and Australia contributed to Project Dunbar (launched by the Innovation Hub of the Bank of International Settlement). The Bahamas and Nigeria have in advance released the CBDC thereof, and a similar measure is expected to be taken by Jamaica in the present quarter.

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