The Bank of England is no exception, having recently consulted twice on what a UK CBDC could look like and how it would interoperate with existing forms of money and, even, potentially new stablecoins. If a CBDC was introduced in the UK, and the Bank is keen to remind us all that no decision has yet been taken on that, then a public/private partnership has been mooted as the optimal way to make that happen.

Whether one looks at this problem from the perspective of a public body or a private, commercial organisation, the central question remains. How will this innovation deliver a tangible benefit to the UK economy?

For some, the answer is obvious. The implementation of a CBDC could deliver enhanced efficiency when processing payments. It could precipitate new innovations, such as programmable money and smart money, delivering an infrastructure that can automate contracts, enable greater control over what money is spent on and provide new ways for consumers to access savings and investment opportunities.

However, there remain obstacles to achieving this. Migration of commercial deposits to a CBDC could reduce the amount of commercial loans that the economy can support, and could lead to financial instability What would the impact be on existing payment infrastructures and how would consumers pay using a CBDC on a daily basis? Would new firms start to offer services in a CBDC environment and what would the commercial model be for their services?

To help answer these questions, I have the privilege of chairing the UK Finance New Digital Money Steering Group. In order for UK consumers and businesses to take advantage of the benefits of a CBDC, we must work with our policymakers to answer some of the concerns that could potentially stand in our way and articulate a clear rationale for industry to stand up funds and invest in this new opportunity.

As we continue this essential work, we look forward to keeping the industry up to date on our progress so keep your eyes peeled for more updates.