Bank of England Project Finds CBDCs Could Introduce 'Programmability' to Money
A trial conducted by the Bank of England (BoE) and the Bank for International Settlements (BIS) Innovation Hub has highlighted the potential central bank digital currencies (CBDCs) have for introducing “programmability” to money.
The findings of the trial, which was dubbed Project Rosalind, indicate that CBDCs could give central banks and governments a number of new tools they never before had, including the opportunity to decide how, where, and for what people’s money should be spend.
Specifically, Project Rosalind focused on the role of application programming interfaces (APIs) in the design of CBDCs, and examined over 30 different use cases that a well-designed digital currency could offer.
Among the claimed benefits is increased convenience for consumers, for example by enabling them to pay via QR codes and other methods at places like shops and restaurants.
Other benefits mentioned included smart contract-like features as known from the world of crypto, where individuals and businesses theoretically could allocate funds for specific purposes and trigger payments based on predefined conditions.
On the flip side, however, programmable CBDCs would undoubtedly also increase the control that central banks and governments could have over individuals' money.
While Project Rosalind was a joint initiative between the BoE and the BIS Innovation Hub London, the researchers emphasized that their findings have implications beyond the United Kingdom.
They encouraged central bankers worldwide to review the results and consider the insights when designing retail CBDC systems.
Commenting in the BIS’ press release, Francesca Hopwood Road, Head of the BIS Innovation Hub London Centre, said the study has pushed forward innovation on CBDCs.
“The
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