Banks

Bank of England and MIT Collaboration on (CBDC)

In recent years, several banking institutions have conducted research on cryptocurrencies. While some entities are still skeptical of the idea of ​​using crypto as an exchange currency, many are looking to study their technology in depth in order to analyze its benefits. In February 2022, the Bank of England and the Massachusetts Institute of Technology (MIT) agreed to collaborate on a twelve-month research project on central bank digital currency (CBDC).

What is the CBDC?

A Central Bank Digital Currency (CBDC) is a digital version of central bank currency. This currency is legal tender, created and guaranteed by a central bank. It represents a claim on the central bank and not on a commercial bank or payment service provider (PSP).

CBDCs are accounted for in a digital ledger (which may or may not be blockchain), increasing the reliability of payments between banks, institutions, and individuals. According to a recent study conducted by the Bank for International Settlements, over 70% of institutions are actively researching and developing proof-of-concepts for CBDCs. Here are three aspects that define a central bank digital currency:

  • Digital Asset: It is a digital asset, it is recorded in a digital ledger which acts as a single source of truth.
  • Guaranteed by the central bank: it represents a claim on the central bank, just like banknotes.
  • Controlled by the central bank: Its is entirely controlled and determined by the central bank.

The Bank of England and the Massachusetts Institute of Technology (MIT) ready to assess the potential of digital currencies

In February 2022, the Bank of England and the Massachusetts Institute of Technology (MIT) decided to collaborate on a twelve-month research project on central bank digital currency (CBDC). The Bank is partnering with the MIT Media Lab’s Digital Currency Initiative (DCI) team to examine the technical challenges, opportunities, and risks of establishing a CBDC.

This collaboration is part of the broader framework of the Bank’s “research and exploration” of the CBDC. It will focus on exploring and experimenting with different technological possibilities. This work relates to exploratory technological research and does not aim to develop an operational CBDC. No decision has been made on whether to introduce a CBDC in the UK.

A decision to introduce the CBDC in England would involve the completion of a national infrastructure project. Undertaking this type of technical research will help inform broader policy thinking about the CBDC. The Bank will provide an update of the results as soon as it completes its research.

Source: Bank of England

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User picture

CT writing

Behind the generic signature “Redaction CT” are young journalists and authors with specific profiles who wish to remain anonymous because they are involved in the ecosystem with certain obligations.

Banks

Bank of England and MIT Collaboration on (CBDC)

In recent years, several banking institutions have conducted research on cryptocurrencies. While some entities are still skeptical of the idea of ​​using crypto as an exchange currency, many are looking to study their technology in depth in order to analyze its benefits. In February 2022, the Bank of England and the Massachusetts Institute of Technology (MIT) agreed to collaborate on a twelve-month research project on central bank digital currency (CBDC).

What is the CBDC?

A Central Bank Digital Currency (CBDC) is a digital version of central bank currency. This currency is legal tender, created and guaranteed by a central bank. It represents a claim on the central bank and not on a commercial bank or payment service provider (PSP).

CBDCs are accounted for in a digital ledger (which may or may not be blockchain), increasing the reliability of payments between banks, institutions, and individuals. According to a recent study conducted by the Bank for International Settlements, over 70% of institutions are actively researching and developing proof-of-concepts for CBDCs. Here are three aspects that define a central bank digital currency:

  • Digital Asset: It is a digital asset, it is recorded in a digital ledger which acts as a single source of truth.
  • Guaranteed by the central bank: it represents a claim on the central bank, just like banknotes.
  • Controlled by the central bank: Its is entirely controlled and determined by the central bank.

The Bank of England and the Massachusetts Institute of Technology (MIT) ready to assess the potential of digital currencies

In February 2022, the Bank of England and the Massachusetts Institute of Technology (MIT) decided to collaborate on a twelve-month research project on central bank digital currency (CBDC). The Bank is partnering with the MIT Media Lab’s Digital Currency Initiative (DCI) team to examine the technical challenges, opportunities, and risks of establishing a CBDC.

This collaboration is part of the broader framework of the Bank’s “research and exploration” of the CBDC. It will focus on exploring and experimenting with different technological possibilities. This work relates to exploratory technological research and does not aim to develop an operational CBDC. No decision has been made on whether to introduce a CBDC in the UK.

A decision to introduce the CBDC in England would involve the completion of a national infrastructure project. Undertaking this type of technical research will help inform broader policy thinking about the CBDC. The Bank will provide an update of the results as soon as it completes its research.

Source: Bank of England

Receive a digest of news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss any of the essential Cointribune!

User picture

CT writing

Behind the generic signature “Redaction CT” are young journalists and authors with specific profiles who wish to remain anonymous because they are involved in the ecosystem with certain obligations.

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