Central Bank Digital Currency

Lord Vaizey of Didcot Excerpts

Tuesday 13th April 2021 Lords Chamber

[Baroness Penn (Con)]

I agree with my noble friend that CBDCs could present a number of benefits, which the Treasury and the Bank are continuing to explore. These may include supporting resilience, innovation, competition and payments, potentially including reducing costs in domestic and international payments. The Bank of England’s paper last year noted the potential for CBDCs to enable smart contracts, including in relation to the supply and delivery of goods.

[Lord Vaizey of Didcot (Con) [V]]

My Lords, while we have been issuing discussion papers, for the last seven years the Chinese have been undertaking practical tests of a digital currency in retail and wholesale markets. When will the Bank of England and the Government start to undertake practical tests for a pound sterling digital currency?

[Baroness Penn (Con)]

My Lords, the Treasury continues work with the Bank of England on its discussion paper and next steps for that. The Bank has also been part of a coalition of central banks, including the Federal Reserve and the European Central Bank, in considering the roles of CBDCs internationally and the importance of cross-border interoperability of such CBDCs.