Reuters, London

The Bank of England and Britain’s finance ministry said on Tuesday that they would hold a formal consultation next year on whether to move forward on a possible central bank digital currency (CBDC) that would take years to introduce.

Central banks across the world are studying digital versions of their currencies to avoid leaving digital payments to the private sector as the decline of cash has accelerated in some cases due to the Covid-19 pandemic.

“No decision has been made on whether to introduce a CBDC in the UK, which would be a major national infrastructure project,” the BoE said in a statement.

“The earliest date for launch of a UK CBDC would be in the second half of the decade,” it added. The consultation paper will set out an assessment from the ministry and BoE of the case for a CBDC before a decision on whether to proceed.

“A technical specification would follow the consultation explaining the proposed conceptual architecture for any CBDC. This could involve in-depth testing of the optimal design for, and feasibility of, a UK CBDC,” the document said.