The Bank of England has published minutes of the fifth and latest CBDC technology forum meeting that took place on 9 June.
Discussions focused on:
- Offline functionality with CBDC – specifically why offline functionality should be a key feature of CBDC in a world where physical cash usage is diminishing. It was noted that offline settlement finality offered benefits in terms of availability, throughput and operational infrastructure costs, where existing real time (online) settlement systems encountered the biggest challenges. It was also noted that, without offline finality, any CBDC system would be difficult to differentiate from any other real time payment system. Offline finality is not without risks however, including risks of counterfeiting and double spending due to added technical complexity.
- CBDC functionalities – the Bank of England also sought the Forum’s thoughts on the relative importance and complexity of potential CBDC functionalities, including payments in scope, interoperability considerations and innovation features. Members discussed a number of different payments for a potential CBDC and the relative complexity to build each of those into the system, including Person-to-Person (P2P) payments, Person-to-Business (P2B) and offline payments. Forum Members thought ensuring low barriers to entry into CBDC for potential PIPs (Payment Interface Providers) and building a simple and performant core infrastructure were the most important aspects of CBDC infrastructure if it were to meet a goal of supporting innovation. Other important features noted by members were ensuring customers are able to change wallet providers easily, ensuring CBDC remains an extensible platform and releasing public developer resources to facilitate wallet software development.
While no decision has been taken on whether the Bank of England will implement a CBDC in the UK, it clearly remains firmly on the agenda.