Bank of England Forms Academic Group for Digital Pound

The Bank of England (BoE) has initiated the establishment of an Academic Advisory Group dedicated to its newly envisioned central bank digital currency (CBDC) project.

This group is aimed at pooling the expertise of various academic fields relevant to the digital pound, encompassing areas such as monetary policy, finance, competition economics, industrial organisation, behavioural science, law, innovation theory, marketing, and business, according to a statement by the BoE.

While the BoE is keen on academic involvement to better grasp the real-world complexities of crafting, implementing, and managing a CBDC, it's important to note that this advisory group won't wield decision-making authority.

Instead, it serves as a knowledge-sharing platform and a hub for research collaboration.

What is a CBDC?

A CBDC is a digital form of a country's official currency that is issued and backed by its central bank, in this case, the Bank of England.

It's different from regular digital currencies or cryptocurrencies like Bitcoin because it's directly linked to a nation's monetary system and is under the control of its central authority.

Academic Input for CBDCs

The BoE's intention is to leverage the group's collective scholarly insights to foster interdisciplinary dialogues, specifically addressing aspects tied to the retail CBDC, the statement added.

The UK initiated a consultation on the CBDC back in February.

Although no definitive choice has been made regarding the introduction of a CBDC, the general consensus emerged that a digital pound would likely be essential in the future.

As the project progresses, it has transitioned to a design phase, with the BoE concentrating on the technological and policy prerequisites for a digital pound over the next 2-3 years.

The UK's finance minister, Jeremy Hunt, expressed enthusiasm about the concept of a digital pound when the consultation was initially launched.

While affirming the continued relevance of cash, he saw the potential of a digital pound, issued and backed by the Bank of England, as a novel and trustworthy payment method, one that offers accessibility and user-friendliness.