• The Bank of England (BOE) has conducted a year-long investigation into the potential advantages of digital currency technology, known as Project Rosalind.
• Results from the trial indicate that a central bank digital currency could facilitate faster payments, enable businesses to develop innovative financial products, and reduce instances of fraud.
• Quant, Amazon UK, Mastercard and Barclays Plc are all experimenting with various aspects of CBDCs such as cash-on-delivery payments and debit cards.
Bank of England Investigates Digital Currency Technology
The Bank of England (BOE) has conducted a year-long investigation into the potential advantages of digital currency technology, known as Project Rosalind. In collaboration with the Bank for International Settlements (BIS), the BoE launched Project Rosalind to explore the potential advantages and feasibility of a central bank digital currency (CBDC).
Project Rosalind Results
On June 16, the BIS unveiled the first part of the trial’s findings which indicated that a CBDC could facilitate faster individual payments, enable businesses to develop innovative financial products, and minimize instances of fraud. Programmability of money allows for online purchases to settle only after customers confirm satisfactory receipt of goods.
Adoption Progress
London-based blockchain technology specialist Quant is leading an effort to create a prototype retail CBDC. During this initial phase eight participants from the banking and large tech industries have been testing its blockchain infrastructure including Amazon UK which trialed CBDC checkout and Mastercard which issued a CBDC debit card. Barclays Plc is also experimenting with cash-on-delivery payments where funds are released to vendors upon satisfactory receipt while Bank of Canada introduced “conditional payment” allowing parents to deposit money contingent on completing specific tasks.
Final Decision Pending Consultation Period
The BOE acknowledges likely necessity for a CBDC in future but will make final decision on adoption following consultation period set to conclude at end June followed by review requiring approval from UK Treasury too.
Gilbert Verdian’s Take On The Matter
Gilbert Verdian, CEO at Quant highlights multi-party lockbox capacity offered by smart contracts enabling parties involved in transactions to protect their interests via transparent agreement on assets held in escrow without need for third party oversight or intermediaries