The Bank of England is one step closer to launching its own digital currency after a year-long project concluded that the technology could support new ways to use money.
Bank of England Working on Digital Currency
The Rosalind Project, run by the UK institution and the Bank for International Settlements, began last year to determine how the so-called central bank digital currency, or CBDC, would work in practice and what benefits it could offer.
The report of the first phase of the experiment, published today by the BIS, revealed that a CBDC could make payments between individuals faster and easier, enable firms to create new financial products, and reduce fraud.
For example, it could allow for money programmability, which means that a payment to an online seller will be paid automatically when a buyer confirms satisfactory receipt of the products.
Initial findings from Project Rosalind contribute to BOE's case of launching its own CBDC dubbed "Britcoin".
While the bank says it's "likely" that a CBDC will be needed in the future, it won't decide whether to continue with the technology until it digests responses to a consultation that will close at the end of June.
The support of the UK Treasury is also needed.
Gilbert Verdian, CEO and founder of London-based blockchain technology provider Quant working on the project, said the UK's current monetary system is "not fit for purpose for a digital society".
*Not investment advice.