LONDON, (Reuters) – The Bank of England (and Britain’s Finance Ministry) announced Tuesday that they will hold a formal consultation next spring on the possibility of introducing a central bank digital currency (CBDC). This would require years of work.

The digital currency versions are being studied by central banks all over the world to ensure that they don’t leave digital payments for the private sector. This is because the declining cash supply has been exacerbated in certain cases by the COVID-19 pandemic.

According to the BoE, “No decision has yet been made about whether the UK should introduce a CBDC.” This is a huge national infrastructure project.

It stated that the UK CBDC launch date would likely be within the second decade.

This consultation paper will provide an overview from both the BoE AND the ministry on the case for CBDC, before the BoE makes a decision about whether or not to proceed.

A technical specification will be prepared following the consultation, which will explain the concept architecture proposed for any CBDC. The document stated that this could include in-depth testing to determine the best design and feasibility for a UK CBDC.

John Glen, minister of financial services, stated that a retail CBDC will be available to businesses and individuals for everyday payment needs. This would help Britain remain at the forefront in innovation and technology within the financial sector.

In July, the European Central Bank took the first steps towards creating a digital euro. It initiated a 24 month investigation phase that will be followed by three year implementation.

After Facebook’s announcement of plans to create its currency in 2019, the work on creating a digital euro was accelerated. This could pose a threat to the core banking business of central banks.

China was at the forefront in CBDC movement, while the U.S. Federal Reserve is more skeptical.

Some central banks warned that CBDCs may be used in large numbers to hollow out banks and deprive them of stable funding sources like retail deposits.