Bank of England to Add CBDC Support to New Payment System

The Bank of England (BoE) is making its new payment settlement infrastructure compatible to support transactions with central bank digital currency (CBDC).

The update by the crypto-centric news website Coindesk followed the central bank’s official announcement on Thursday of rebuilding its payments infrastructure. 

The monetary regulator hired IT consulting company Accenture for the upgrade under a £150 million ($195 million) contract.

The overhaul will be done in the real-time gross settlement (RTGS) infrastructure of the UK banking system that currently handles more than £685 billion ($900 billion) worth of transactions every day.

“This is a key milestone in our ambitious and exciting Programme to renew RTGS,” Victoria Cleland, executive director for banking, payments, and innovation at the Bank of England, said in an official statement.

The new settlement infrastructure is expected to roll out in 2022.

Making the infrastructure future-proof

Though the official announcement did not specify anything about the digital currency support, the crypto publication reported on the addition of such support to secure the infrastructure for future changes.

Cleland, however, stressed on the future-proofing of the new infrastructure.

“It will support a resilient financial system that protects the UK’s financial and monetary stability in the years to come,” she added. “The renewed RTGS service will be designed not only to benefit everyone in the country who makes payments, but to keep the UK at the leading edge of payments innovation.”

Like any other major monetary regulator, Bank of England is also actively debating on the issuance of the digital version of the pound sterling. It is also a member of a central bank consortium involving the counterparts from Japan, Canada, and Europe to check the feasibility to launch a digital currency.

Earlier this month, BoE Governor Andrew Bailey confirmed that the central bank is actively considering the prospect for a digital pound. However, it’s former governor warned on the impact of such a digital currency on the existing monetary system before his exit.