The Bank of England has published the minutes of its third meeting of the CBDC Engagement Forum. This most recent session primarily focused on person to business payments with CBDC and the opportunities CBDC could present for retail payments. 

Key points arising from the meeting were as follows:

  • any CBDC proposition would need to support consumer and business needs to a degree comparable to currently available payment options and a clear roadmap of technical requirements would be needed to ensure smooth adoption of any potential CBDC;
  • standards and rules, KYC, ecosystem support and industry coordination were noted as more complex to achieve with respect to CBDC but also potentially most important for successful adoption in retail payments;
  • regarding merchant and consumer sentiment with respect to cryptocurrencies, consumers are increasingly interested in using cryptocurrencies to invest and also as a means of payment for everyday services, in turn driving merchant interest in cryptocurrencies. Perceived benefits of accepting payment in cryptocurrencies for merchants include potential improvements on the speed, cost, and ease of settlement, but user experience, the riskiness and volatility of cryptocurrencies, regulatory uncertainty and a general lack of understanding have all impacted adoption;
  • two stylised CBDC configurations were presented, a programmable CBCD to improve retail payments and a narrow CBDC to promote inclusivity at point of sale:
    • the former could add a novel function to money but also enhance traditional functions of money. Gym membership payments were used as an example where programmability and smart contracts could bring improvements by adding payment based on usage, reducing risk for merchants, and generating richer data;
    • a narrow CBDC for inclusion purposes could facilitate lower identification requirements capped at low volumes of spending. This could potential facilitate access to digital payments with streamlined KYC and on-boarding processes (e.g. a mobile phone number), reflecting smaller financial crime and fraud risks of low volume transactions.

The next meeting will be held in July 2022.  For now, whether or not CBDC will be adopted in the UK remains to be seen.