Bank of England and MIT Announce CBDC Collaboration

BOE and MIT have agreed to partner on a twelve-month research project on CBDCs.

The central bank is planning to explore opportunities within the CBDC ecosystem.

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According to the details shared by the Bank of England, the twelve-month research project will explore potential challenges, opportunities, and risks associated with the designing of a central bank digital currency system. For the research, BOE will work with the Digital Currency Initiative (DCI) team in the Media Lab of the Massachusetts Institute of Technology.

“The collaboration forms part of the Bank‘s wider ’research and exploration into CBDC and will be focused on exploration and experimentation of potential technology approaches. This work is focused on exploratory technology research and is not intended to develop an operational CBDC,” BOE highlighted in a recent announcement.

Central banks around the world have increased their efforts for the research and development of CBDCs. Amid rising demand for emerging technology, the European Central Bank (ECB) in July 2021 said that it has launched the investigation phase of the Digital Euro project to address key issues regarding the design and distribution of the Digital Euro.

CBDC Research

Earlier this month, the Bank of Canada also announced a collaboration with MIT for CBDC research. While some countries are still thinking about the implications of a CBDC project on local economies, countries like Kenya, Korea, and Jamaica have already taken lead in the global CBDC ecosystem. Recently, the Bank of Korea completed the first phase of CBDC testing.

While providing details of the recent partnership with MIT, BOE mentioned: “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.”