The Bank of England is to launch a Digital Pound Lab as it sets out its blueprint for the design phase of a future Britcoin.
Operating in a sandbox environment, the Digital Pound Lab will enable hands-on experimentation for testing API functionality, innovative use cases and potential business models for PIPs and ESIPs.
The Bank's consultation groups, the Engagement Forum and the Academic Advisory Group will continue, while the Technology Forum will be wound down. Engagement focused on technology will continue, says the Bank, but it will be more direct and detailed, supported by the Digital Pound Lab.
At the same time, the Bank has published the first of series of design notes which set out emerging thinking on specific topics related to a digital pound. The published design note identifies the key components the Bank and HM Treasury will explore in developing the blueprint.
The blueprint is one of four workstreams in the digital pound design phase. Its purpose is to provide a comprehensive proposition for a digital pound, including technology, operational, ecosystem, commercial, regulatory and financial considerations, and the roles that both the Bank and the private sector could play in delivering it.
Once complete, the blueprint will be a record of the proposed model and design of a potential digital pound and will form the basis for assessing the benefits and costs, says the Bank.
The Bank and HM Treasury have proposed a public-private platform model for the provision of a digital pound. In this model, the Bank would build and operate the ledger, while regulated private firms would access the core infrastructure via APIs. Private sector firms would deal with all user-facing interactions, including handling customers’ information, and be able to develop and offer innovative services using a digital pound.
"As is the case with all our work during the design phase, no decision has yet been taken on whether to build a digital pound," states the Bank. "Design notes do not represent final policy or design decisions, nor do they represent policy proposals upon which we are formally consulting.
"On completion of the design phase and taking account of evolutions in the wider payments landscape, the Bank and the Government will decide whether to proceed to build a digital pound. If the decision was taken to build a digital pound, it would only be introduced once Parliament had passed the relevant primary legislation."