By Samuel Indyk

Investing.com – The Bank of England has provided an update on the exploration of a UK Central Bank Digital Currency (CBDC), saying that no decision has yet been made on whether to introduce a CBDC in the UK.

This is a statementThe central bank stated on its website that the CBDC was a digital currency issued by Bank of England. It can be used by both households and businesses to pay their daily payment requirements.

Next steps

Next year, the Treasury and Bank of England will launch a consultation to discuss the benefits of a CBDC. This consultation will also examine the need for further research to create an operational and technological model.

The consultations will inform the decision on whether the authorities are content to move into a ‘development’ phase which is expected to take several years.

The central bank said that if the results of the ‘development’ phase conclude that the case for CBDC is made, then the earliest date for a launch of a CBDC in the UK would be the second half of the decade.

“The plan to publish a consultation next year on CBDC is a crucial step in our policy development, especially as we further our thinking on the pressing issues at hand,” said Bank of England Deputy Governor for Financial Stability Jon Cunliffe.

“What it will do is provide a platform for interested parties and relevant groups to engage with the key questions on the merits of CBDC, and whether the public sector should advance to a development phase.”

Is the Bank of England ahead of the curve?

Sweden with its ekrona project is Europe’s leading country in its efforts to create a CBDC. In 2017, Riksbank began to analyze the necessity of an e-krona and continues testing the technology in Sweden.

China, which has launched a pilot program for CBDC in the latter part of 2019, is globally the leader with one.

The digital yuan transaction volume has risen to CNY 62 Billion, roughly $9.7 billion. Currently, around 1.6 million merchants accept China’s CBDC.

Although the digital yuan was tested in several major cities, there are no plans for an extensive rollout.

Speaking earlier today at a conference hosted by the Bank of Finland, People’s Bank of China Governor Yi Gang said the country plans to further “improve the e-CNY ecosystem”.

Some may argue that the Bank of England risks falling behind the curve, after stating that they don’t foresee a launch until the second half of the decade.

Some may say it is better to wait and identify the pros, cons and lessons learned from other people who launched before.