The Bank of England has made significant developments in its central bank digital currency (CBDC) program. Tom Mutton, the head of the fintech and CBDC program at BoE, recently shared insights on the privacy aspect of the CBDC and why they might look for other options beyond blockchain as the underpinning technology.
Mutton, during his interview, said that during a recent meeting of technologists hosted by the BoE to discuss digital pound design, there was a clear disagreement on which ledger should be used for the CBDC. Thus, the bank aims to trail multiple ledger technologies including blockchain.
The digital pound dubbed Britcoin development plans was first proposed when the UK Treasury and the Bank established a joint task force to research a UK CBDC in April 2021. Later, in February 2023 the Bank issued a consultancy paper outlining the design of the digital pound.
Currently, the BOE and the Treasury are seeking feedback from the stakeholders and technology experts on the proposed design of its CBDC. The feedback is open until June 30.
Related: Digital pound could co-exist with private stablecoins
Mutton, during his interview, said that during a recent meeting of technologists hosted by the BoE to discuss digital pound design, there was a clear disagreement on which ledger should be used for the CBDC. Thus, the bank aims to trail multiple ledger technologies including blockchain.
“We want to be compatible with distributed-ledger business models in the private sector, but we were not convinced that distributed ledgers offered more efficiency over conventional ledgers,” Mutton said.
Cryptox reached out to BoE to enquire about what other ledger technologies they were considering or on trial and was redirected to the consultancy paper. However, BoE did not respond at the time of writing.
Apart from the discussions around the ledger technology, Mutton also talked about the privacy aspect of the CBDC and claimed the digital pound will be focused on offering privacy to the users and won’t collect personal data. He said that the bank will be focused on providing the infrastructure while the private players will be responsible for the innovation.
“There will be no data shared with the Bank of England, we will know what transactions have happened but we will have no data on the individual who did it. While the wallet provider would have the user data but won’t have access to their transaction data.”
Mutton claimed BoE or the government won’t have access to any user data and even the wallet providers who have limited access to that data will need consent from the users to what data they can store. With a focus on retail, the BoE has noted earlier that the digital pound could co-exist with private stablecoins
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