Bank of England invites “Proof of Concept” applications for digital currency CBDC

Bank of England invites Proof of Concept

The UK’s central bank, the Bank of England, is inviting “Proof of Concept” applications for creating a sample digital wallet to hold CBDC (Central Bank Digital Currency) starting from Dec 23, 2022. 

As per the Bloomberg report, the BoE plans to launch a consultation for the CBDC case in the upcoming weeks. Along with that, the bank will also launch a Technology Working Paper featuring cutting-edge technology details about the potential build of a digital pound.

On Dec 9, the Bank of England posted an application request on the digital marketplace of the UK government. Currently, the government budget for the initial five-month contract for Proof of Concept is 200,000 pounds.

The key deliverable for this “Proof of Concept” project is to build a mobile app for both iOS and Android users, a merchant website and the back-end infrastructure supporting the app and the website to store user details and transaction data.

Per the official guidelines, the POC (Proof of Concept) wallet must offer basic functionality like a signup process, details upgradation, account balance and transaction details, and displaying notifications. Also, it must be able to be loaded and unloaded with a CBDC, support P2P payments through a QR code or account ID and carry out online business transactions.

The BoE clarified that it doesn’t want to build a user wallet itself, as the project aims to examine the end-to-end user journey. The project is designed to sharpen the functional needs of both the private sector and the bank and make digital currency more tangible for external and internal shareholders. 

According to BoE, the project is part of its diverse set of reforms encouraging the financial services industry of the UK. It supports the Rosalind Project, a joint experiment of BoE with the BIS Innovation Hub to create API prototypes for CBDC.

On Dec 9, the bidding process started after Mr. Hunt shared a package of 30 regulatory reforms, called Edinburgh Reforms, for the UK’s financial services, including the digital pound allocation. These reforms are designed to boost economic growth and innovation post-Brexit.

Also read: Stripe launches Fiat-to-Crypto offering for Web3 businesses

The Bank of England announced earlier that the launch of CBDC is expected by 2030. Meanwhile, the government has also released a consultation, Reforming the Consumer Credit Act 1974, to modernize and upgrade consumer lending regulations and protection rights to ensure they work better and correctly with a rising digital economy. 

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