According to an announcement on the Bank of England’s website, the bank has entered into an agreement with the Massachusetts Institute of Technology (MIT) Media Lab Digital Currency Initiative (DCI) for conducting joint research on Central Bank Digital Currency (CBDC).
The announcement revealed that the English bank has no plans to establish a CBDC at this time, so the research would be conducted solely for academic purposes.
This is not the first time the bank has researched CBDCs. The bank previously published a report on the operation of a national digital currency, and DCI responded with how the paper’s objectives could be met.
Last year, the HM Treasury and the bank formed a committee to study CBDC, analyze issues surrounding it, and devise ways for the UK to use it.
In addition, the UK’s Economic Affairs Committee issued a report on the significance of CBDCs earlier this year.
The report conveyed the Committee’s thoughts on the UK’s need for a CBDC, stating that while a national digital currency may have its benefits, it should still be properly considered whether there is a need for them.
Growing Interest in CBDC Projects
While the Bank of England is only interested in the feasibility of CBDCs, countries such as Australia, Malaysia, China, South Africa, Singapore, Nigeria, and the Bahamas have made significant progress in their projects, with some of them launching a national digital asset previously.
Aside from the English bank, the DCI has also collaborated with the Federal Reserve Bank of Boston and Canada’s apex bank on its OpenCBDC project.
A press release issued by The Bank of Canada revealed the bank’s collaboration with MIT to study CBDCs. Boston’s collaboration is known as the “Hamilton Project,” and it began in 2020.
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