We are seeking industry and public views on the key design choices that determine the model. The Consultation Paper is accompanied by a Technical Working Paper which sets out our current thinking on the relevant technology and seeks feedback on the approaches we propose to consider. There is not time today to go through the model in detail, but I will briefly set out some of the most important details of what we propose. Page 7  We envisage the digital pound as a partnership with the private sector. The Bank would provide the digital pound and the central infrastructure, including the ‘core ledger’. Private sector firms – which could be banks or approved non-bank firms – would provide the interface between the Bank’s central infrastructure and users by offering wallets and payment services. These private companies would be able to integrate the digital pound, as the settlement asset, into the services they would offer to wallet holders. The wallets would be operated on a ‘pass-through’ basis. That is to say, they would not constitute a claim on the wallet provider in the way that a bank account is a claim on a bank. Nor would they represent a custody arrangement. Rather, the wallets would hold all of the customer related information and ‘pass-through’ the customers instructions to the Bank’s infrastructure. All of the digital pounds would be held on the Bank of England’s central ledger. Privacy has been a major theme of the Taskforce’s engagement with industry and the public.
We envisage that these could operate alongside the digital pound and alongside commercial bank money and cash. The digital pound could act as a bridging asset between different types of privately issued digital money and establish standards for interoperability. And, crucially, the requirement for privately issued digital money to be exchangeable on demand and at par for Bank of England digital pounds would help secure the interchangeability and uniformity of money in the UK. Finally, many central banks, across the globe are exploring the issuance of a central bank digital currency for both retail and wholesale purposes. A few have now been launched[15]. Page 10  There is clearly a great opportunity and a great need for international cooperation in this area. Interoperability between national and regional central bank digital currencies could bring substantial benefits by reducing the cost and frictions in cross border payments. At the same time, there are broader macro-economic and geopolitical issues that need to be considered. The Bank of England is working actively on these issues with international counterparts through the Bank for International Settlements Committee on Payments and Market Infrastructures (CPMI), through the G7, the G20 and FSB and through close cooperation with a small group of advanced economy central banks[16]. Conclusion To conclude, the Consultation Paper and accompanying Technology Working Paper marks the end of the first stage of the work of the Bank of England – HM Treasury Taskforce.