Pass-through wallets would be made available by the private sector and will not hold digital pounds on their balance sheet. The Digital Pound is not meant to be a savings product, but rather a method of exchange. As a result, there won’t be any interest in it. Users’ private information would not be accessible to the Bank or the Government.

A summary of the Consultation Paper on Digital Pound was recently given by The Bank of England and HM Treasury. The proposal for UK CBDC’s conceptual architecture and design elements were discussed in the presentation.

The Bank of England would introduce a new kind of money called the “digital pound” that anybody could use for daily transactions.

Similar to banknotes, the digital pound would be pegged to the sterling exchange rate and have a steady value. A £10 banknote would always be equivalent to £10 in digital pounds.

The digital pound would be created and backed by the government, as contrast to cryptocurrencies, which are privately issued.

In meeting some of the  members stated that the digital pound infrastructure would need to be extendable and developed to allow future developments in technology and business models as the prospective implementation of a digital pound is still a few years away. Members also dicussed how the RTGS, the existing primary settlement system, and the digital pound will coexist.

Infrastructure provided by the public sector will assist private sector innovation. In the “core ledger,” users’ digital pounds would be stored. Interacting with end consumers directly would fall under the purview of the private sector. The platform will be extensible, adaptable, and interoperable in addition to being operationally resilient.

Pass-through wallets would be made available by the private sector and will not hold digital pounds on their balance sheet.

Members highlighted that “pass-through” wallets, which wouldn’t keep digital currency on their balance sheets, opened the door for new business prospects in the payments industry, which would enable the emergence of new, creative solutions. Members believed it could be beneficial to broaden public interaction with prospective future ecosystem players, including retailers and Payment Interface Providers (PIPs).

The Digital Pound is not meant to be a savings product, but rather a method of exchange. As a result, there won’t be any interest in it. Users’ private information would not be accessible to the Bank or the Government.

Galactik Views