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The Bank of England plans a series of experiments with distributed ledger technology and wholesale CBDCs to assess their impact on the evolving payments landscape. 
The <a href="https://crypto.news/tag/bank-of-england/" target="_blank" rel="noreferrer noopener">Bank of England</a> aims to address rapid advancements in money and payment technologies with its wholesale central bank digital currency, according to a Jul. 30 <a href="https://www.bankofengland.co.uk/-/media/boe/files/paper/2024/the-boes-approach-to-innovation-in-money-and-payments.pdf" target="_blank" rel="">discussion paper</a> released by governor Andrew Bailey. The paper, titled “The Bank of England’s approach to innovation in money and payments,” emphasizes that innovations in money and payments, including distributed ledger technology and tokenization, pose “opportunities and risks.” 
“Innovations in money and payments are therefore inseparable from the goals we seek to achieve as central banks. […] Understanding these innovations, preparing for them, and supporting their adoption in a safe manner, are core to our goals,” Bailey noted. 
Unlike retail <a href="https://crypto.news/tag/cbdc/" target="_blank" rel="noreferrer noopener">CBDCs</a> designed for the general public, wholesale CBDCs are digital versions of a country’s currency intended exclusively for financial institutions. These digital currencies streamline transactions between banks and other financial entities, improving both the speed and security of large-scale transactions and settlements. 
 You might also like: <a href="https://crypto.news/bank-of-england-develops-retail-cbdc-wallet-official/"> ‘Highly unlikely’ Bank of England develops retail CBDC wallet, says official </a> 
The central bank acknowledges an “interoperability challenge,” meaning different jurisdictions could create new systems that “can’t interact effectively.” To address this, the regulator wants to develop a “synchronization interface,” a tool that would allow transferring an asset from one party to another on an external platform, with the cash leg of the transaction taking place on the real-time gross settlement platform. 
<h2 class="wp-block-heading" id="seeking-public-feedback">Seeking public feedback</h2> 
To stay competitive in the global central banking arena, the Bank of England plans to test various use cases, functionalities, and designs for wholesale CBDCs and their synchronization. While specific timelines for these experiments have not been disclosed, the bank is inviting public feedback on its proposed approach, with responses due by the end of October. 
In June, the&nbsp;Bank for International Settlements&nbsp;issued a <a href="https://crypto.news/central-banks-less-likely-to-issue-retail-cbdcs-in-mid-term-bis-says/" target="_blank" rel="noreferrer noopener">report</a>, indicating that a vast majority of central banks worldwide are steering away from issuing retail versions of CBDCs in the medium term, with only 12% of respondents expressing plans to do so. The BIS report also indicated a higher likelihood of wholesale CBDCs being issued within the next six years, with the potential for nine such currencies to be in circulation “by the end of this decade.” 
 Read more: <a href="https://crypto.news/cambodias-cbdc-dev-soramitsu-to-pilot-digital-currency-for-papua-new-guinea/"> Cambodia’s CBDC dev Soramitsu to pilot digital currency for Papua New Guinea </a>

Bank of England rolls out consultation paper for wholesale CBDC

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