During a panel session at UK Finance’s Digital Innovation Summit last week, our founder and CEO discussed the digital pound with a panel that included senior representatives from Citi, the Bank for International Settlements, and the Bank of England.
Moderated by Santander’s Chief Payments Officer, Paul Horlock, the afternoon session – part of the conference’s New Digital Money workstream, chaired by Nicole Sandler, Head of Digital Policy at Barclays – was entitled ‘the vision for the digital pound’ and delved into a UK central bank digital currency and how the concept would ultimately benefit companies, consumers and the economy at large.
Horlock turned first to Tom Mutton, CBDC Director at the Bank of England, to get a summary of where the central bank was with its digital currency thinking. Mutton explained that the initial explorations, including Project Rosalind, were complete and they were now embarking on a design phase.
“We’ve said a digital pound is needed,” said Mutton. “That’s a long way from saying we’re going to build it. We need consultation and a rigorous framework for decision-making.”
That consultation is well underway and Mutton underlined the large amount of feedback he had already received while reiterating that “everyone’s voice needs to be heard”. To him the pressing question is: where does the innovation come from to support a digital economy?
Having worked on Project Rosalind which explored how the digital pound could deliver real benefits, that’s a question Gilbert Verdian, our founder and CEO, has strong views on. With existing money, “we’ve reached ‘peak payments’,” said Gilbert. “What’s next is tokenised money that can have logic and programmability built-in.” That’s where the benefits of digital currency will be realised.
In response to a question from the audience about the “traceability” of digital currencies, Gilbert pointed out another key benefit: “money laundering and fraud – which is ever increasing and which the banks are liable for – will always exist but this new form of money gives us far better tools to solve it [at the network level, before transactions can occur].”
Tony McLaughlin, responsible for Emerging Payments & Business Development at Citi, is certainly convinced and was quick to point out that those benefits can also be delivered by tokenised commercial bank money. “Why did the core ledger for Project Rosalind only include central bank money? Why not include commercial bank money too and let that be the catalyst for innovative use cases,” he asked.
Rodney Garrat, a senior adviser at the Bank for International Settlements, was keen to illustrate one of those use cases: a digital currency offers the possibility of instant settlement. “The grand vision is you have not only tokenised money but also tokenised assets,” he concluded.
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