The Bank of England (BoE) is unlikely to issue a central bank digital currency (CBDC) any time soon due to a lack of technical expertise, according to Jon Cunliffe, the lieutenant governor. Speaking at a treasury select committee hearing, Cunliffe stated that there is a greater than 50% chance that the central bank will eventually issue a CBDC, but the institution is not yet ready to do so.

The UK has been exploring the possibility of a digital pound for several years, but the BoE has been cautious about going ahead with the initiative. The lieutenant governor explained that the next phase of development will involve partnering with the private sector to test a potential digital pound in a simulated environment. This will help the BoE to gain the necessary experience to build a working prototype and test it in a real environment.

While the BoE has been exploring the potential benefits and risks of a CBDC, the institution has also been monitoring developments in other countries. China, for example, has been working on its own digital currency, the digital yuan, which has already been tested in various pilot programs. The European Central Bank (ECB) has also been exploring the possibility of a digital euro and has launched a public consultation on it.

The BoE is aware that the development of a CBDC would require significant investment in infrastructure and technology, as well as a thorough understanding of the potential risks and benefits. The institution has been consulting with stakeholders in the private sector and academia to ensure it has access to the necessary expertise.

Cunliffe stressed that the BoE is committed to exploring the potential of a digital pound, but that the institution is not yet ready to move forward with the development of a CBDC. The next phase of the initiative will be critical in terms of gaining the necessary experience and testing the technology in a simulated environment. If successful, the BoE may eventually move forward with developing a working prototype and eventually implementing a digital pound.