BoE is exploring both wholesale and retail CBDC, but sees limitations UnitedKingdom BankofEngland JonCunliffe
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The deputy governor went on to say that the central bank expects to have the required expertise by the time it moves forward with the next phase of development, which includes testing a digital pound with private sector partners. “Distributed ledger technology suffers with some real challenges on scalability,” Cunliffe said, “On the retail side of it, we put in 30,000 transactions per second as a base case, going to 100,000. I don't think you can find any distributed ledger technology that gets remotely close to that. I'm not saying it can't. But what a crypto firm or a new payment firm has demonstrated – a proof of concept – is a very different thing to scaling up to using economy-wide or cross-border.
He also gave the example of being able to use tokenized assets to make a “house purchase without having to have solicitors and escrow,” adding “There's a lot of experimentation going on.”Speaking more directly about the digital pound, Cunliffe said the design and structure could vary greatly depending on what the CBDC is used for.
The deputy governor compared a potential digital pound with Apple’s iPhone app store, saying that a CBDC is about “opening a new frontier for people to improve payments and the way in which money is used.”
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