Bank of England’s (BOE) central bank digital currency (CBDC) program could use a different ledger than the popular blockchain technology as its underlying technology.
Tom Mutton, manager of the BoE’s fintech and CBDC program, recently discussed the privacy aspect of the CBDC and why they may consider alternatives to the blockchain as the underlying technology.
During his interview, Mutton stated that at a recent meeting of technologists hosted by the BoE to debate the design of the digital pound, there was an apparent disagreement regarding which ledger should be used for the CBDC.
Consequently, the Bank intends to monitor multiple ledger technologies like blockchain.
The Britcoin development plans were first proposed in April 2021, when the UK Treasury and the Bank established a joint task force to investigate a UK CBDC. Later, in February 2023, the Bank issued a consultation paper outlining the digital pound’s design.
Bank of England and Treasury are currently soliciting feedback from stakeholders and technology experts on the proposed CBDC design. The feedback period ends on June 30.
“We want to be compatible with distributed-ledger business models in the private sector, but we were not convinced that distributed ledgers offered more efficiency over conventional ledgers,” Mutton said.
Mutton also discussed the privacy aspect of the CBDC, claiming that the digital pound will be centered on providing users with privacy and will not collect personal information. According to him, the Bank will focus on delivering infrastructure, while private players will be responsible for innovation.
“There will be no data shared with the Bank of England, we will know what transactions have happened but we will have no data on the individual who did it. While the wallet provider would have the user data but won’t have access to their transaction data.”
Mutton asserted that neither the Bank of England nor the government could access user data. Even wallet providers with limited access to that data need user consent to store any data.
Focusing on retail, the Bank of England has previously stated that the digital pound could coexist with private stablecoins.
