The central bank of the United Kingdom will be exploring the implementation of central bank digital currencies (CBDCs) with the Massachusetts Institute of Technology.
CBDCs have been on the radar of several countries around the world, and, currently, only 9 countries have successfully launched their digital currencies.
A few countries, though, have scrapped their CBDC projects including Senegal and Ecuador. However, larger countries are seemingly taking the future of finance more seriously.
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Based on the official news release by the Bank of England, the two institutions will be working alongside each other for a whole year in order to explore "potential technical challenges, trade-offs, opportunities, and risks" that come with central bank digital currencies.
The central bank will be in contact with MIT Media Lab’s newly launched unit called the Digital Currency Initiative (DCI) and perform exploratory, experimental uses and an initial design of CBDCs.
With that being said, the Bank of England clarifies that the CBDC research is purely for research purposes, stating:
"No decision has been made on whether to introduce a CBDC in the UK, which would be a major national infrastructure project. Undertaking this type of technical research will help inform wider policy thinking around CBDC."
This will be the second banking institution that has partnered with MIT for CBDC research. Just a few weeks ago, the Bank of Canada announced its partnership with MIT for the same "twelve-month" CBDC research initiative.
