Bank of England to experiment with wholesale CBDC, synchronization

The Bank of England (BOE) is proposing an experimental program using its Real-Time Gross Settlement (RTGS) system and wholesale central bank digital currency (wCBDC) to judge their settlement capacity and interoperability, the central bank announced in a discussion paper. 

The BOE promised to undertake the new series of experiments within the next six months. The experiments largely examine CBDC settlement in comparison with the synchronization of non-CBDC central bank money, as trialed in Project Meridian. A synchronization network integrates with existing RTGS systems.

Not clear that DLT is needed at all

Both CBDC and synchronization approaches may depend on distributed ledger technology. The BOE starts with a word of caution about it:

“The extent to which programmable platforms could impact on our monetary and financial stability objectives will ultimately depend on the likelihood that financial markets take up these technologies at scale. The Bank’s current assessment is that the likelihood of this remains uncertain.”

“Yet to emerge DLT use cases may also affect take-up, so we must guard against a ‘failure of imagination,’” the paper added.